Utah Contractor Practice Exam 2025 - Free Contractor License Practice Questions and Study Guide

For businesses that have one or more employees, the requirement to provide workers' compensation coverage is mandated by law in many jurisdictions, including Utah. This insurance protects both the employees and the employer by covering medical expenses and lost wages resulting from work-related injuries or illnesses.

By providing workers' compensation, businesses fulfill their legal obligation to ensure employee welfare while also protecting themselves from potential lawsuits related to workplace injuries. It offers a no-fault system that benefits both parties; employees receive timely medical care and compensation without having to prove fault, and employers benefit by limiting their liability.

The other options imply scenarios that do not align with the legal requirements. Choosing not to provide coverage would leave the business vulnerable to fines and legal actions. Providing coverage only for part-time workers ignores the necessity of covering all employees regardless of their employment status. Lastly, the idea that coverage is only required if stipulated in a contract overlooks the intrinsic legal obligation that businesses have towards their employees.