If the employer commits serious and willful misconduct resulting in loss of both hands, by what percentage should reserves be increased?

If the employer commits serious and willful misconduct resulting in loss of both hands, by what percentage should reserves be increased?

• A. 10 percent
• B. 20 percent
• C. 70 percent
• D. 50 percent

Answer: (D)

When an employer engages in serious and willful misconduct that leads to a severe, permanent disability, the reserves are increased to fund the anticipated higher future costs and to serve as a deterrent. For a case involving loss of both hands, the standard adjustment is a 50% increase in reserves. This level reflects the substantial ongoing costs associated with such a catastrophic injury while aligning with established penalties for willful misconduct. Smaller increases would underestimate the future obligations, and larger increases aren’t the standard adjustment for this scenario.

When an employer engages in serious and willful misconduct that leads to a severe, permanent disability, the reserves are increased to fund the anticipated higher future costs and to serve as a deterrent. For a case involving loss of both hands, the standard adjustment is a 50% increase in reserves. This level reflects the substantial ongoing costs associated with such a catastrophic injury while aligning with established penalties for willful misconduct. Smaller increases would underestimate the future obligations, and larger increases aren’t the standard adjustment for this scenario.