Who Benefits When You Settle Your Workers’ Compensation Claim?

While workers’ compensation claims do not require anyone to be proven at fault for a workplace accident in order for benefits to be available, they still work similarly to traditional personal injury claims in a few other ways. One of those ways that could have a substantial impact on the benefits you receive now and in the future is the right you have to seek a one-time settlement—or accept an offer of one—rather than continuing to receive payments on a weekly basis.

Depending on your circumstances, you may benefit significantly from settling your workers’ compensation case, but there are also advantages to this option for insurance providers and your employer. If you have received a settlement offer for your workers’ comp claim, you should strongly consider discussing it with a qualified lawyer before making any binding decision to accept it and formally end your claim.

Determining the Value of a Workers’ Comp Settlement

Unlike personal injury litigation, workers’ comp claims—and by association, workers’ comp settlements—will never provide compensation for “pain and suffering” or any other type of non-economic harm stemming from an on-the-job injury or illness. Instead, the value of a settlement will depend entirely on what workers’ comp benefits an injured employee would be entitled to in the future if they chose not to settle, as well as how likely they are to receive those benefits in the end with all other factors considered.

For example, a person who suffers a broken leg that completely prevents them from working at all on a short-term basis might be eligible for temporary total disability benefits until they are fully healed. However, the doctor selected by their employer or their insurance provider might claim that the injured worker can return to normal work before that worker feels like they are back to 100 percent of their previous working capacity, meaning that they might not receive any future disability benefits at all unless they agreed to a settlement.

Things can be even more complicated if a workplace accident results in total and complete disability, in which case settlement value would be based on the estimated present value of extensive future benefits. A knowledgeable workers’ compensation attorney could offer crucial guidance about what a fair settlement value would be in light of a particular claimant’s unique situation.

What Happens After Accepting a Settlement Offer?

Depending on the state in which an employee files their workers’ compensation claim, they may be eligible for a structured settlement that provides them with payments in several installments over time, or they may be limited only to lump-sum settlements all paid out at once. Either way, accepting a settlement offer will end the workers’ comp process almost immediately, offering a quick and possibly more financially sustainable outcome than a prolonged claim might have provided.

On the other hand, lump-sum settlements may leave seriously injured workers without any financial support if they need new surgeries and other medical treatment in the future, which ongoing workers’ comp benefits may have covered. In other words, a settlement may save you money or save your employer’s insurance provider money depending on the circumstances, which is why it can be so crucial to review any potential settlement with seasoned legal counsel.