Worker’s compensation cases often end in settlement, but the type of settlement and the types of benefits covered by a settlement can vary depending on the type and severity of the injury. To ensure that you avail yourself of all the benefits possible via a worker’s compensation settlement, consult an experienced worker’s compensation attorney.

What Is Workers’ Compensation?

Workers’ compensation benefits are there to protect you in the event you get injured or become ill while on the job. In most US states, workers’ compensation is a required insurance benefit that an employer provides to employees. The insurance provides security to the workers while they recover from their injury or illness.

In 2018, there were 2.8 million non-fatal injuries at work, according to a Bureau of Labor Statistics report. With approximately 90% of the American workforce covered by workers’ compensation insurance, it’s essential to understand the kinds of settlements that could be offered by the insurance company.

 

Types of Settlements

There are three main results of a worker’s compensation settlement, and each differs with respect to when an injured party receives their settlement funds.

The first type of settlement is a lump sum payment, also referred to as a commutation settlement. This form of settlement is a lump sump of all future benefits, which effectively terminates an injured employee’s right to any future benefit stemming from the same injury.

The second common form of settlement release is a compromise and release settlement. The result of accepting a compromise and release settlement is the injured employee accepts their payment as a full settlement of their claim. Accepting this settlement restricts the injured employee from accepting any future benefits.

The third most common form of worker’s compensation settlement is a structured settlement. The effect of accepting a structure settlement is the same as a compromise and release except that you receive your payments over time.

As we mentioned, if you are considering negotiating a settlement with your insurance company, you can accept payment in one of two ways: a lump sum or a structured settlement. A lump-sum payment comes in all at once rather than weekly or monthly. With a structured settlement, you negotiate payments over time. The structured settlement gives you dependable income for a term, while a lump sum can be easy to overspend.

 

Potential Advantages and Disadvantages of Accepting A Workers’ Comp Settlement

When you’ve been offered a workers’ compensation settlement, you have the option to accept it or reject it. As with any other decision in life, there are potential advantages as well as potential disadvantages to accepting the workers’ comp settlement you’ve been offered.

First, the advantages.

1. You avoid going to trial. Any time you can avoid a trial is advantageous to you because trials are risky. With a trial, you must rely on the judge to make a decision in your favor. However, the judge could decide that you are owed less than what your settlement would have been.
2. You might not receive a lump sum payment if you go to trial. Some states don’t allow for lump sum workers’ compensation payments after a trial. In those cases, you could be restricted to receiving payments each week.
3. Courts could be backlogged. You’ve been injured, and you have medical bills and other bills that are behind due to a temporary inability to work. Now, you’re stuck waiting for a trial, which could take a while. If you agree to a settlement, you can save yourself the stress and the time associated with waiting for a hearing.
4. It can be a good financial decision. Sometimes, the insurance company will offer a settlement with the condition that you forfeit future benefits that may not be needed.

Now, the disadvantages.

1. The settlement can affect future benefits. If you are unsure whether you will need additional medical care, you might want to pass on a settlement. A lump sum can be great, but it can be an unnecessary risk to take. If you take a lump sum and then have additional expensive treatments, surgeries, or medications, you may be unable to afford the treatments.
2. You could blow all of the money you are awarded. It’s tempting to spend money when it comes in rather than putting it aside for a rainy day or for future medical expenses. If you spend your entire lump sum, you’ll be without any incoming payments while you’re on the disabled list.

Before deciding whether to take a workers’ compensation settlement or not, it’s wise to consult with an attorney trained to handle workers’ comp cases. The attorney can help you determine what fair compensation would be for your injury. Here are some factors to consider when making that decision:

• The medical bills you already have, and the likelihood there will be more medical treatments needed. You can estimate the future costs based on your already incurred costs, how you are recovering, and what your doctor indicates might be necessary.
• The sum of wages you’ve already missed by being on the injured list, as well as any potential lost earnings are going forward.
• Disability payments that you are currently receiving or will receive in the future.
• The cost of training for rejoining the workforce.
• The rules and regulations govern workers’ compensation cases in the state where the injury happened.
• The strength of your claim and whether there is anything that could cause your award amount to decrease.
• Your attorney’s fees and court costs.

Remember, on occasion, an insurance company will start distributing an award and then refuse to continue paying the claim. In this case, the company often contends that the injury either doesn’t exist or didn’t happen while at work. This scenario is likely to land you in court defending yourself against the insurance company’s claims.

 

Types of Benefits

A worker’s compensation settlement covers many benefits. Common benefits include:

• Medical treatment. This includes costs of medical treatment required due to injury.
• Temporary disability. This includes wage loss benefits that were received by an injured employee while they were unable to work.
• Permanent partial disability. This classification indicates than an employee’s work capacity is limited due to the injury and benefits are received commensurate with the level of disability.
• Permanent total disability. This classification indicates that an employee’s work capacity has been hindered due to an injury. Permanent disability means that an employee is completely unable to work. The services of an attorney are paramount when an employee has work-related injuries that lead to permanent disability.

Many states require a review of a claim and a proposed settlement order by a court. The point is to verify that settlements don’t violate any laws within the state. Settlements after litigation are particularly prone to review.

If you have been injured on the job and are seeking to file a worker’s compensation claim, Morgan & Morgan is here to help. We have an experienced team of disability lawyers ready to zealously represent you and get you the benefits you deserve. Contact Morgan & Morgan today for a free consultation.

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