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Definition of Indemnity Benefits

Indemnity, or Indemnity Benefits, refers to security or protection against loss or damage and the payment of monetary compensation that results from that loss or damage. As it applies to workers' compensation, it is the act of providing restitution for a workers' compensation claim or loss that has been discharged or paid by another liable party. Indemnity benefits are compensation that are paid to a workers' compensation claimant for lost time that has been brought about by a work-related injury or illness. These benefits replace wages during the time that an employee is not able to work because of that work-related injury or illness.

In all jurisdictions, there is a waiting period before indemnity benefits are paid. This waiting period is seven days in most states but three days in a few states. There are different types of indemnity benefits that are determined by whether a worker's injury or illness results in temporary or permanent disability. The temporary indemnity benefits are divided into two types, which are temporary total disability (TTD) and temporary partial disability (TPD). These temporary benefits are called by different names from state to state. Permanent indemnity benefits are also divided into two types, which are permanent total disability (PTD) and permanent partial disability (PPD). Permanent benefits are also known by different names in different states.

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