Which of the following would be considered indemnity?

• A. Permanent Disability
• B. Medical Expense
• C. Litigation Expense
• D. Wage Reimbursement

Answer: (A)

Indemnity means cash benefits that replace income lost due to a work injury. In SIP and workers’ comp, benefits fall into two broad categories: indemnity (cash for wage loss or impairment) and medical (payments for treatment).

Permanent disability is a form of indemnity because it provides a cash payment tied to impairment that affects earning capacity, i.e., it compensates for ongoing wage loss or reduced ability to work.

Medical expense covers treatment costs for medical care, not cash for lost wages. Litigation expense is the cost of defending or pursuing the claim, not a wage-replacement payment. Wage reimbursement would be paying back wages, but indemnity typically refers to the employee receiving ongoing cash benefits for lost wages or impairment rather than reimbursements to the employer.