AIC 304 Practice Test - 100 Questions and Correct Answers Latest Practice Exam 2026/2027
AIC 304 Practice Test with 100 Questions and
Correct Answers
AIC 304 Latest Practice Exam 2026/2027
Associate in Claims — Workers’ Compensation and Liability Claims
Examination Overview: This practice exam contains 100 multiple-choice questions covering the AIC 304
Associate in Claims examination content outline for Workers’ Compensation and Liability Claims. Questions
are distributed across nine content domains aligned with current 2026/2027 claims handling practices,
statutory frameworks, and regulatory standards. Each question presents four options (A–D) with one correct
answer identified by [CORRECT] and is followed by a detailed rationale explaining the correct response and
identifying common pitfalls in each distractor.
Cognitive Level Distribution: Approximately 35% of questions target recall of claims principles and
definitions, 45% require application of principles to claim scenarios, and 20% demand analysis of complex
fact patterns requiring integration of multiple claims concepts. Approximately 75% of items are
scenario-based; 25% are direct recall. Distractors are constructed to reflect common AIC 304 examination
pitfalls including confusion of compensability criteria, misapplication of negligence elements, incorrect wage
calculations, misidentification of coverage triggers, and misapplication of fraud indicators.
Section 1: Workers' Compensation Fundamentals
History, Statutory Framework, & Exclusive Remedy (Q1-Q12)
Q1: Prior to the enactment of workers' compensation statutes in the early 20th century, an
injured worker seeking recovery from an employer had to file a tort action. Which of the
following best describes the MOST significant obstacle the worker faced in that pre-statutory
system?
A. The worker had to prove the employer's negligence, but the employer could assert the fellow
servant rule, assumption of risk, and contributory negligence as complete defenses. [CORRECT]
B. The worker was automatically entitled to recovery upon showing that an injury occurred on the
employer's premises, regardless of fault.
C. The worker could recover only if the employer carried voluntary accident insurance, and recovery was
capped at the policy limits.
D. The worker could recover in tort only if the employer was a federal contractor, since state tort law did
not apply to industrial injuries.
Correct Answer: A
Rationale: Before workers' compensation statutes, injured employees had to sue in tort and prove employer
negligence. Employers raised three powerful common-law defenses: the fellow servant rule (negligence of a
Associate in Claims - AIC 304 Page 1
,AIC 304 Practice Test - 100 Questions and Correct Answers Latest Practice Exam 2026/2027
coworker broke the chain), assumption of risk (the employee accepted ordinary hazards of the job), and
contributory negligence (any negligence by the employee barred recovery entirely). These defenses made successful
recovery rare, fueling the ‘grand bargain’ that became workers’ compensation. Options B, C, and D misstate the
pre-statutory framework—there was no no-fault entitlement, no mandatory insurance requirement, and no
federal-contractor restriction.
Q2: A warehouse employee in Ohio is injured when a forklift tips over. The employer is covered
under Ohio’s state-fund workers’ compensation system. The employee wishes to also sue the
employer in tort for negligence, alleging the forklift was poorly maintained. Which doctrine is the
PRIMARY barrier to the employee's tort action?
A. The exclusive remedy doctrine, which makes workers’ compensation the employee’s sole
remedy against the employer for an accidental workplace injury. [CORRECT]
B. The fellow servant rule, which bars tort recovery when a coworker contributed to the injury.
C. The going-and-coming rule, which precludes recovery for injuries sustained on the employer’s
premises.
D. The collateral source rule, which offsets any tort recovery by the amount of comp benefits paid.
Correct Answer: A
Rationale: The exclusive remedy doctrine is the cornerstone quid pro quo of workers’ compensation: the employer
provides no-fault benefits, and in exchange the employee cannot sue the employer in tort for an accidental injury.
The fellow servant rule (B) is a pre-statutory common-law defense, not a modern bar. The going-and-coming rule
(C) addresses compensability, not the tort bar, and does not apply to on-premises injuries. The collateral source rule
(D) governs offset of benefits from other sources, not the tort bar. The correct answer is A.
Q3: Which of the following categories of workers is generally covered by the FEDERAL
employees' compensation system (Federal Employees' Compensation Act, FECA) rather than by a
state workers' compensation act?
A. Civilian employees of the federal government, including postal workers, who suffer
work-related injuries while performing official duties. [CORRECT]
B. Longshoremen and harbor workers loading or unloading vessels on navigable waters.
C. Employees of private interstate trucking companies operating under DOT authority.
D. Crew members of vessels engaged in interstate commerce.
Correct Answer: A
Rationale: FECA covers civilian federal employees (including postal workers) for work-related injuries.
Longshoremen and harbor workers are covered by the Longshore and Harbor Workers’ Compensation Act
(LHWCA), not FECA—making B incorrect. Private interstate trucking employees are covered under their state of
employment workers’ comp acts, so C is wrong. Crew members of vessels fall under the Jones Act, a separate
federal scheme, making D incorrect. The correct answer is A.
Q4: A claimant is a maritime employee who spends approximately 60% of his workday on a fixed
oil platform located on the Outer Continental Shelf and 40% on a vessel. After being injured on
the platform, he seeks benefits. Which statutory framework MOST likely applies?
A. The Outer Continental Shelf Lands Act (OCSLA) extends the Longshore and Harbor
Workers’ Compensation Act (LHWCA) to cover injuries on the OCS. [CORRECT]
B. The Jones Act, because the worker spends a substantial portion of his time on a vessel.
C. State workers’ compensation, because the platform is fixed and therefore not a vessel.
Associate in Claims - AIC 304 Page 2
,AIC 304 Practice Test - 100 Questions and Correct Answers Latest Practice Exam 2026/2027
D. FECA, because the platform is on federal submerged lands.
Correct Answer: A
Rationale: Under OCSLA, the LHWCA is extended to cover injuries occurring on the subsoil and seabed of the
OCS, including fixed platforms. When the injury occurs on the platform itself, OCSLA/LHWCA governs—not the
Jones Act (which requires a vessel and seaman status). State workers’ comp does not apply to OCS operations.
FECA covers only federal civilian employees. The correct answer is A.
Q5: An injured worker asserts that even though workers’ compensation is the exclusive remedy,
she may still sue her employer in tort because the employer ‘intentionally removed a safety guard’
from a press, knowing injury was substantially certain to result. Which exception to exclusive
remedy is the employee attempting to invoke?
A. The intentional-tort exception, recognized in many jurisdictions when the employer commits
an act with intent to injure or knowledge that injury is substantially certain to occur.
[CORRECT]
B. The dual-capacity exception, which applies when the employer acts in a separate capacity other than
as employer.
C. The third-party-over exception, which permits suits against the employer’s workers’ comp insurer.
D. The collateral-source exception, which permits tort recovery when comp benefits are inadequate.
Correct Answer: A
Rationale: Most jurisdictions recognize a narrow intentional-tort exception to exclusive remedy when the employer
either intends to injure or knows injury is substantially certain—an objective, not subjective, standard in most
states. The dual-capacity doctrine (B) applies when the employer occupies a second, non-employer role (e.g.,
manufacturer of a defective product). Third-party-over actions (C) involve the employer’s insurer or other parties,
not the employer itself. There is no ‘collateral-source exception’ (D). The correct answer is A.
Q6: An employee receives $50,000 in workers’ compensation indemnity benefits after a back
injury. The employee then sues a third-party manufacturer of the press that caused the injury and
recovers $200,000. The employer’s workers’ comp carrier asserts a lien. Under the majority
‘make-whole’ rule, what is the carrier’s recovery?
A. The carrier is reimbursed its $50,000 lien only AFTER the employee is fully made whole from
the third-party recovery, including attorney fees. [CORRECT]
B. The carrier is reimbursed its $50,000 lien FIRST, before the employee receives any portion of the
third-party recovery.
C. The carrier receives its $50,000 lien plus a proportionate share of the employee’s attorney fees.
D. The carrier’s lien is extinguished once the third-party suit is concluded, regardless of the recovery
amount.
Correct Answer: A
Rationale: Under the majority make-whole rule, the workers’ comp carrier’s subrogation lien is subordinate to the
injured employee’s right to be made whole. The carrier reimburses only after the employee has recovered full
compensation for damages (including attorney fees incurred). The ‘lien-first’ approach (B) is the minority rule.
Options C and D misstate the doctrine. The correct answer is A.
Q7: Workers’ compensation is commonly described as a ‘no-fault’ system. Which of the following
BEST captures what ‘no-fault’ means in this context?
Associate in Claims - AIC 304 Page 3
, AIC 304 Practice Test - 100 Questions and Correct Answers Latest Practice Exam 2026/2027
A. The employee need not prove the employer was negligent, and the employer generally cannot
defend on the basis of the employee’s own negligence. [CORRECT]
B. The employee cannot recover if he or she was at fault in causing the injury, regardless of employer
fault.
C. The employer is strictly liable in tort for all workplace injuries, and the employee may elect between
tort and comp remedies.
D. No-fault means the employee receives benefits only when the employer admits fault in writing.
Correct Answer: A
Rationale: The ‘no-fault’ principle means compensability does not depend on proof of employer negligence, and the
employee’s ordinary contributory negligence is generally not a defense (though intoxication, willful misconduct, and
horseplay may be). Option B describes the old contributory negligence rule. Option C incorrectly states strict tort
liability. Option D is wrong because admission of fault is not required—and is generally irrelevant. The correct
answer is A.
Q8: Which statement BEST describes the relationship between state workers’ compensation
statutes and the federal Longshore and Harbor Workers’ Compensation Act (LHWCA)?
A. LHWCA covers maritime employees engaged in maritime employment on navigable waters;
state acts generally cover most land-based private employment, with concurrent jurisdiction
issues addressed through choice-of-law principles. [CORRECT]
B. LHWCA fully preempts all state workers’ comp acts for any worker near navigable waters.
C. State acts exclusively cover all private-sector employment, and LHWCA applies only to federal
maritime employees.
D. LHWCA and state acts apply simultaneously to all employees, with the worker electing which to
claim under.
Correct Answer: A
Rationale: LHWCA covers maritime employees on navigable waters (situs) engaged in maritime employment
(status), and overlaps with state coverage in certain areas (e.g., ship repair). LHWCA does not fully preempt state
acts (B), and state acts cover the vast majority of land-based private employment (C is wrong). The worker does not
freely elect between systems (D); jurisdiction is determined by situs/status and statutory criteria. The correct answer
is A.
Q9: An employer fails to carry workers’ compensation insurance in a state where coverage is
compulsory. An employee is injured. Under the typical statutory framework, which consequence
MOST likely follows?
A. The employer loses the protection of the exclusive remedy doctrine and may be sued in tort by
the injured employee, in addition to facing criminal and civil penalties. [CORRECT]
B. The employee has no remedy because the employer was uninsured at the time of injury.
C. The employer remains protected by exclusive remedy but is fined by the state; the employee must
wait for coverage to be procured.
D. The employee’s only remedy is to file a wage claim with the U.S. Department of Labor.
Correct Answer: A
Rationale: In compulsory states, an uninsured employer typically loses the exclusive remedy shield and becomes
exposed to a tort action by the injured worker, plus administrative penalties and potential criminal liability. The
employee retains comp rights (often through an Uninsured Employers Fund or direct claim against the employer), so
B is wrong. Option C is wrong because the exclusive remedy protection is forfeited. Option D misstates the
Associate in Claims - AIC 304 Page 4
AIC 304 Practice Test with 100 Questions and
Correct Answers
AIC 304 Latest Practice Exam 2026/2027
Associate in Claims — Workers’ Compensation and Liability Claims
Examination Overview: This practice exam contains 100 multiple-choice questions covering the AIC 304
Associate in Claims examination content outline for Workers’ Compensation and Liability Claims. Questions
are distributed across nine content domains aligned with current 2026/2027 claims handling practices,
statutory frameworks, and regulatory standards. Each question presents four options (A–D) with one correct
answer identified by [CORRECT] and is followed by a detailed rationale explaining the correct response and
identifying common pitfalls in each distractor.
Cognitive Level Distribution: Approximately 35% of questions target recall of claims principles and
definitions, 45% require application of principles to claim scenarios, and 20% demand analysis of complex
fact patterns requiring integration of multiple claims concepts. Approximately 75% of items are
scenario-based; 25% are direct recall. Distractors are constructed to reflect common AIC 304 examination
pitfalls including confusion of compensability criteria, misapplication of negligence elements, incorrect wage
calculations, misidentification of coverage triggers, and misapplication of fraud indicators.
Section 1: Workers' Compensation Fundamentals
History, Statutory Framework, & Exclusive Remedy (Q1-Q12)
Q1: Prior to the enactment of workers' compensation statutes in the early 20th century, an
injured worker seeking recovery from an employer had to file a tort action. Which of the
following best describes the MOST significant obstacle the worker faced in that pre-statutory
system?
A. The worker had to prove the employer's negligence, but the employer could assert the fellow
servant rule, assumption of risk, and contributory negligence as complete defenses. [CORRECT]
B. The worker was automatically entitled to recovery upon showing that an injury occurred on the
employer's premises, regardless of fault.
C. The worker could recover only if the employer carried voluntary accident insurance, and recovery was
capped at the policy limits.
D. The worker could recover in tort only if the employer was a federal contractor, since state tort law did
not apply to industrial injuries.
Correct Answer: A
Rationale: Before workers' compensation statutes, injured employees had to sue in tort and prove employer
negligence. Employers raised three powerful common-law defenses: the fellow servant rule (negligence of a
Associate in Claims - AIC 304 Page 1
,AIC 304 Practice Test - 100 Questions and Correct Answers Latest Practice Exam 2026/2027
coworker broke the chain), assumption of risk (the employee accepted ordinary hazards of the job), and
contributory negligence (any negligence by the employee barred recovery entirely). These defenses made successful
recovery rare, fueling the ‘grand bargain’ that became workers’ compensation. Options B, C, and D misstate the
pre-statutory framework—there was no no-fault entitlement, no mandatory insurance requirement, and no
federal-contractor restriction.
Q2: A warehouse employee in Ohio is injured when a forklift tips over. The employer is covered
under Ohio’s state-fund workers’ compensation system. The employee wishes to also sue the
employer in tort for negligence, alleging the forklift was poorly maintained. Which doctrine is the
PRIMARY barrier to the employee's tort action?
A. The exclusive remedy doctrine, which makes workers’ compensation the employee’s sole
remedy against the employer for an accidental workplace injury. [CORRECT]
B. The fellow servant rule, which bars tort recovery when a coworker contributed to the injury.
C. The going-and-coming rule, which precludes recovery for injuries sustained on the employer’s
premises.
D. The collateral source rule, which offsets any tort recovery by the amount of comp benefits paid.
Correct Answer: A
Rationale: The exclusive remedy doctrine is the cornerstone quid pro quo of workers’ compensation: the employer
provides no-fault benefits, and in exchange the employee cannot sue the employer in tort for an accidental injury.
The fellow servant rule (B) is a pre-statutory common-law defense, not a modern bar. The going-and-coming rule
(C) addresses compensability, not the tort bar, and does not apply to on-premises injuries. The collateral source rule
(D) governs offset of benefits from other sources, not the tort bar. The correct answer is A.
Q3: Which of the following categories of workers is generally covered by the FEDERAL
employees' compensation system (Federal Employees' Compensation Act, FECA) rather than by a
state workers' compensation act?
A. Civilian employees of the federal government, including postal workers, who suffer
work-related injuries while performing official duties. [CORRECT]
B. Longshoremen and harbor workers loading or unloading vessels on navigable waters.
C. Employees of private interstate trucking companies operating under DOT authority.
D. Crew members of vessels engaged in interstate commerce.
Correct Answer: A
Rationale: FECA covers civilian federal employees (including postal workers) for work-related injuries.
Longshoremen and harbor workers are covered by the Longshore and Harbor Workers’ Compensation Act
(LHWCA), not FECA—making B incorrect. Private interstate trucking employees are covered under their state of
employment workers’ comp acts, so C is wrong. Crew members of vessels fall under the Jones Act, a separate
federal scheme, making D incorrect. The correct answer is A.
Q4: A claimant is a maritime employee who spends approximately 60% of his workday on a fixed
oil platform located on the Outer Continental Shelf and 40% on a vessel. After being injured on
the platform, he seeks benefits. Which statutory framework MOST likely applies?
A. The Outer Continental Shelf Lands Act (OCSLA) extends the Longshore and Harbor
Workers’ Compensation Act (LHWCA) to cover injuries on the OCS. [CORRECT]
B. The Jones Act, because the worker spends a substantial portion of his time on a vessel.
C. State workers’ compensation, because the platform is fixed and therefore not a vessel.
Associate in Claims - AIC 304 Page 2
,AIC 304 Practice Test - 100 Questions and Correct Answers Latest Practice Exam 2026/2027
D. FECA, because the platform is on federal submerged lands.
Correct Answer: A
Rationale: Under OCSLA, the LHWCA is extended to cover injuries occurring on the subsoil and seabed of the
OCS, including fixed platforms. When the injury occurs on the platform itself, OCSLA/LHWCA governs—not the
Jones Act (which requires a vessel and seaman status). State workers’ comp does not apply to OCS operations.
FECA covers only federal civilian employees. The correct answer is A.
Q5: An injured worker asserts that even though workers’ compensation is the exclusive remedy,
she may still sue her employer in tort because the employer ‘intentionally removed a safety guard’
from a press, knowing injury was substantially certain to result. Which exception to exclusive
remedy is the employee attempting to invoke?
A. The intentional-tort exception, recognized in many jurisdictions when the employer commits
an act with intent to injure or knowledge that injury is substantially certain to occur.
[CORRECT]
B. The dual-capacity exception, which applies when the employer acts in a separate capacity other than
as employer.
C. The third-party-over exception, which permits suits against the employer’s workers’ comp insurer.
D. The collateral-source exception, which permits tort recovery when comp benefits are inadequate.
Correct Answer: A
Rationale: Most jurisdictions recognize a narrow intentional-tort exception to exclusive remedy when the employer
either intends to injure or knows injury is substantially certain—an objective, not subjective, standard in most
states. The dual-capacity doctrine (B) applies when the employer occupies a second, non-employer role (e.g.,
manufacturer of a defective product). Third-party-over actions (C) involve the employer’s insurer or other parties,
not the employer itself. There is no ‘collateral-source exception’ (D). The correct answer is A.
Q6: An employee receives $50,000 in workers’ compensation indemnity benefits after a back
injury. The employee then sues a third-party manufacturer of the press that caused the injury and
recovers $200,000. The employer’s workers’ comp carrier asserts a lien. Under the majority
‘make-whole’ rule, what is the carrier’s recovery?
A. The carrier is reimbursed its $50,000 lien only AFTER the employee is fully made whole from
the third-party recovery, including attorney fees. [CORRECT]
B. The carrier is reimbursed its $50,000 lien FIRST, before the employee receives any portion of the
third-party recovery.
C. The carrier receives its $50,000 lien plus a proportionate share of the employee’s attorney fees.
D. The carrier’s lien is extinguished once the third-party suit is concluded, regardless of the recovery
amount.
Correct Answer: A
Rationale: Under the majority make-whole rule, the workers’ comp carrier’s subrogation lien is subordinate to the
injured employee’s right to be made whole. The carrier reimburses only after the employee has recovered full
compensation for damages (including attorney fees incurred). The ‘lien-first’ approach (B) is the minority rule.
Options C and D misstate the doctrine. The correct answer is A.
Q7: Workers’ compensation is commonly described as a ‘no-fault’ system. Which of the following
BEST captures what ‘no-fault’ means in this context?
Associate in Claims - AIC 304 Page 3
, AIC 304 Practice Test - 100 Questions and Correct Answers Latest Practice Exam 2026/2027
A. The employee need not prove the employer was negligent, and the employer generally cannot
defend on the basis of the employee’s own negligence. [CORRECT]
B. The employee cannot recover if he or she was at fault in causing the injury, regardless of employer
fault.
C. The employer is strictly liable in tort for all workplace injuries, and the employee may elect between
tort and comp remedies.
D. No-fault means the employee receives benefits only when the employer admits fault in writing.
Correct Answer: A
Rationale: The ‘no-fault’ principle means compensability does not depend on proof of employer negligence, and the
employee’s ordinary contributory negligence is generally not a defense (though intoxication, willful misconduct, and
horseplay may be). Option B describes the old contributory negligence rule. Option C incorrectly states strict tort
liability. Option D is wrong because admission of fault is not required—and is generally irrelevant. The correct
answer is A.
Q8: Which statement BEST describes the relationship between state workers’ compensation
statutes and the federal Longshore and Harbor Workers’ Compensation Act (LHWCA)?
A. LHWCA covers maritime employees engaged in maritime employment on navigable waters;
state acts generally cover most land-based private employment, with concurrent jurisdiction
issues addressed through choice-of-law principles. [CORRECT]
B. LHWCA fully preempts all state workers’ comp acts for any worker near navigable waters.
C. State acts exclusively cover all private-sector employment, and LHWCA applies only to federal
maritime employees.
D. LHWCA and state acts apply simultaneously to all employees, with the worker electing which to
claim under.
Correct Answer: A
Rationale: LHWCA covers maritime employees on navigable waters (situs) engaged in maritime employment
(status), and overlaps with state coverage in certain areas (e.g., ship repair). LHWCA does not fully preempt state
acts (B), and state acts cover the vast majority of land-based private employment (C is wrong). The worker does not
freely elect between systems (D); jurisdiction is determined by situs/status and statutory criteria. The correct answer
is A.
Q9: An employer fails to carry workers’ compensation insurance in a state where coverage is
compulsory. An employee is injured. Under the typical statutory framework, which consequence
MOST likely follows?
A. The employer loses the protection of the exclusive remedy doctrine and may be sued in tort by
the injured employee, in addition to facing criminal and civil penalties. [CORRECT]
B. The employee has no remedy because the employer was uninsured at the time of injury.
C. The employer remains protected by exclusive remedy but is fined by the state; the employee must
wait for coverage to be procured.
D. The employee’s only remedy is to file a wage claim with the U.S. Department of Labor.
Correct Answer: A
Rationale: In compulsory states, an uninsured employer typically loses the exclusive remedy shield and becomes
exposed to a tort action by the injured worker, plus administrative penalties and potential criminal liability. The
employee retains comp rights (often through an Uninsured Employers Fund or direct claim against the employer), so
B is wrong. Option C is wrong because the exclusive remedy protection is forfeited. Option D misstates the
Associate in Claims - AIC 304 Page 4
