Legal Definitions - compensable

Compensable describes something for which a person or entity is legally entitled to receive payment, reimbursement, or other form of redress. It means that a loss, injury, or service is recognized as warranting financial or other restitution.

Here are some examples illustrating the term:

• Workplace Injury: A factory worker suffers a repetitive strain injury in their wrist due to the nature of their tasks on the assembly line. Because the injury developed as a direct result of their employment duties, it is considered compensable under workers' compensation laws.

  Explanation: This means the worker is eligible to receive benefits, such as medical treatment costs and compensation for lost wages, from their employer's insurance, as the injury is directly linked to their work.

• Breach of Contract: A catering company signs a contract to provide food for a large corporate event. On the day of the event, the company fails to deliver any food, forcing the corporation to hastily arrange an alternative at a much higher cost. The additional expenses incurred by the corporation due to the caterer's failure are compensable.

  Explanation: The corporation suffered a direct financial loss because the catering company did not fulfill its contractual obligations, making those losses eligible for recovery.

• Property Damage: While performing maintenance on a utility pole, a utility company's crew accidentally severs a cable leading to a nearby home, causing a power outage and damaging the homeowner's sensitive electronics. The cost to replace the damaged electronics and any reasonable expenses incurred due to the outage would be compensable.

  Explanation: The homeowner's losses are eligible for reimbursement because they resulted directly from the utility company's actions, even if accidental, making the company legally responsible for the damages.