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Myths and realities of workers' compensation indemnity payments

Learn what is driving up costs of administering indemnity payments to injured workers.

By Dave Stair | Updated on May 18, 2015

Workers’ compensation is more challenging than ever before. Payers are continually navigating a delicate balance between ensuring injured workers’ receive appropriate treatment and cost containment. Many of the headlines we see related to cost controls are focused on medical costs. And, while this remains critical, it’s also important to bring attention to the costs associated with managing indemnity payments. 

We all know that indemnity payments play a significant role in claim costs—anywhere from 40%-60% of expenses associated with a claim. The actual amount depends on numerous factors ranging from severity to how long the claim is open. However, increasing administrative burdens, workforce dynamics and processing fees associated with indemnity payments may actually be costing payers more than necessary.

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