No matter how many safety precautions are taken, construction and trade work come with inherent risks. When injuries occur, understanding the type of workers’ compensation claim that follows is critical for controlling costs and keeping projects on schedule. Two of the most common claim types are Indemnity claims and Medical-Only claims. While both provide necessary benefits to injured workers, the impact on an employer’s bottom line can be very different.
What is a Medical-Only Claim?
A medical-only claim occurs when an injured employee requires medical treatment but does not miss time from work. Examples might include:
• A worker who receives stitches but can continue with light or modified duty
• An employee prescribed medication or therapy but able to return to work the next day
• Any case where treatment is provided, but wages are not paid because the employee continues working in some capacity
Medical-only claims are generally less expensive and have a smaller impact on an employer’s experience modification factor (mod). In the construction industry, where margins can be tight, keeping claims medical-only whenever possible helps stabilize insurance costs.
What is an Indemnity Claim?
Indemnity claims arise when an injury prevents the employee from working and wage replacement benefits must be paid. These are often referred to as “lost wage” claims. Examples include:
• A back injury from heavy lifting that requires weeks of recovery
• A fall that leads to surgery and extended time away from the job site
• Any injury where the employee cannot be accommodated with light or modified duty
Indemnity claims are significantly more expensive than medical-only claims because they involve both medical costs and lost wage payments. They also have a larger effect on the mod, which can directly drive up future insurance premiums.
Preventing Medical-Only Claims from Escalating to Indemnity
Many claims start as medical-only but can turn into indemnity if not handled proactively. Employers can reduce this risk by:
• Offering modified duty – Bringing employees back to safe, restricted work keeps them engaged and reduces downtime.
• Using approved medical providers – Physicians who understand construction work and accommodations are more likely to recommend restricted duty instead of complete time off.
• Communicating consistently – Checking in with injured employees shows support and helps avoid claims that unnecessarily escalate.
Both medical-only and indemnity claims provide important protections for injured employees, but indemnity claims are far more costly and disruptive. A proactive approach, with strong return-to-work programs and communication, can make all the difference in keeping claims medical-only and costs under control.
Members of workers’ compensation captives like PBA benefit from working directly with experts to proactively handle claims. This means getting employees back to work faster after injuries, which in turn keeps premium rates stable and your business more efficient. PBA members also have access to peers in their industry, meaning they are afforded insight from other best-in-class organizations on how to manage and prevent similar claims — especially those unique to their industry.
