What is an "indemnity benefit" in the context of workers' compensation?

An "indemnity benefit" in the context of workers' compensation refers specifically to a payment that compensates an injured worker for lost wages due to their inability to work as a result of their injury. This type of benefit is essential because it provides financial support during the period of recovery when the individual is not earning their typical income. The aim is to replace a portion of the wages that the worker would have received had they remained employed and healthy.

Medical expenses, travel reimbursements, and penalties for safety violations, while related to the workers' compensation system, do not fall under the definition of indemnity benefits. Medical expenses pertain to the costs of treatment for the injury, travel reimbursements address expenses incurred while seeking medical treatment, and penalties for employer violations are punitive measures rather than compensatory benefits. Understanding how indemnity benefits operate helps clarify their role in supporting injured workers and ensuring their financial stability during recovery.