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Indemnity Benefits Have Many Options To Replace Wages


Term Of The Day – Indemnity Benefits

The term refers to the amount paid out due to a loss or damage. In Workers Comp, Indemnity Benefits pay an employee for lost wages due to an on the job injury or illness. It covers anything that prevents a worker from returning to work either temporarily or permanently.

Picture of Injured Hand Indemnity Workers Comp

In the past, indemnity benefits were responsible for approximately 70% of  total benefits paid on Wokrers Compensation claims.    Medical benefits now are resposbile for 70% of  the total benefits.

This change was due to the advancements in medical diagnoses and treatment along with the spiraling cost of treatment.

The type of benefits include:

  • Temporary Total – wage replacment benefits
  • Temporary Partial – benefits due to a reduction in wages
  • Permanent Partial- loss of use of a body part
  • Permanent Total-unable to return to gainful employment

Forecasting these types of benefits is much easier than the medical benefits.   The most important consideration for claim severity is whether or not an employee can ever return to work.  If an employee switches from Temporary Total to Permanent Total, the value of the claim will likely skyrocket as lifetime medical benefits will have to be a considernation.

Related: Workers Comp Indemnity Reserves Basic Definition

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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