What Is Workers Comp Indemnity?

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The term "indemnity" refers to monetary compensation due to loss or damage. Workers compensation indemnity benefits compensate an employee for loss wages due to an on-the-job injury, accident or event that prevents him from returning to work, whether temporarily or permanently.

Temporary Indemnity

  • An employee generally qualifies for temporary indemnity, or compensation, after she misses more than seven days of work because of an on-the-job injury that leads to partial or total disability.

Injured But Still Able to Work

Injured and Unable to Work

  • Often, injured employees receive a lower indemnity benefit while on partial or temporary disability status when they cannot return to work--such as 64 percent of their average pre-injury weekly income.

Example of Partial Compensation

  • An injured employee who returns to work but has not yet fully improved may earn $100 per week. His pre-injury income was $600 per week. That employee could possibly receive a weekly indemnity benefit of 80 percent of his average weekly pre-injury wage, or $480, until he is able to fully return to work. Thus, his weekly take-home would be $580 per week while injured.

Incentives to Return to Work

  • Injured but recuperating workers receive the extra incentive of returning to work as soon as possible by generally being offered a higher indemnity rate upon their return than the rate they received while unable to work.

Warning

  • State laws may vary regarding workers compensation benefits. See your state's insurance department guidelines for further information on indemnity rates.

References

  • Photo Credit construction,worker, image by Greg Pickens from Fotolia.com broken wrist image by askthegeek from Fotolia.com
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