What is not considered indemnity?

• A. Litigation expense
• B. Permanent disability
• C. Medical expense
• D. Vocational rehabilitation

Answer: (A)

Indemnity refers to cash benefits paid to an employee to offset wage loss due to a work‑related injury. It’s about money that replaces earnings, not about services or costs to defend or treat the claim.

Litigation expense is not an indemnity payment. It’s a legal/defense cost incurred by the plan or insurer to handle the claim, not a benefit paid to the employee for time off or impairment. The other items are connected to the injury in ways that generate wage‑loss considerations: permanent disability represents a loss of earning capacity, and vocational rehabilitation aims to get the employee back to work (reducing future wage loss). Medical expense covers treatment needed to recover, which also relates to the claim’s overall impact, even though it’s not wage replacement itself. The key distinction is that indemnity is cash paid for wage loss, while litigation costs are not.