Alabama Property and Casualty Practice Exam

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What term refers to an employee's entitlement to wage benefits if they are injured on the job?

Compensation
Reimbursement
Indemnity
Disability

The correct answer is: Compensation

The term that refers to an employee's entitlement to wage benefits if they are injured on the job is "compensation." In the context of workers' compensation, this term encompasses the wage replacement benefits that an employee receives after a work-related injury or illness. Compensation is designed to financially support employees while they recover and to ensure they are not left without an income due to circumstances beyond their control. It's important to understand that while other terms can relate to financial support in various contexts, they do not specifically refer to the structure of benefits an injured worker receives as part of employment protections. Reimbursement typically involves repaying for expenses incurred, indemnity often refers to compensation for damages or losses in a legal context, and disability relates to the condition affecting a person's ability to work rather than the benefits they receive from their employer specifically following an injury.