It is important to talk with an experienced employment law attorney before accepting a settlement offer from an insurance company. The insurance company had a team of lawyers draft that settlement agreement so that it favors your employer. It is prudent to have your own lawyer, who is looking out for your interests, to review any settlement agreement to ensure that you are getting everything you are entitled to under the law. Whenever you settle for a lump sum cash settlement, you will be exchanging some or all of your rights to workers’ compensation benefits.

What if I think it’s too low?

You do not have to accept any workers’ compensation settlement agreement. They are purely voluntary. Your employer, or its insurance company, do not have to agree to settle your claim, and you do not have to accept any offer of settlement given by your employer or insurance company. Depending on your situation, you may be able to negotiate a higher settlement. Sometimes settlement is not appropriate; however, there are some situations where settlement is in your best interest.

Why would the insurance company want to settle?

It may seem puzzling, at first, that an insurance company would want to pay a large lump sum rather than the relatively small compensation amount of (usually) a few hundred dollars each week and the occasional disbursements for your medical care. The reason for this is that, in each case, the insurance company believes that it would actually be in their best interest to resolve your claim for a lump sum of money now rather than pay out your checks and pay for your medical treatment on a weekly basis for possibly years in the future. It means that your ongoing treatment poses a greater level of risk than an immediate disbursement of cash.

Once you settle, you release the employer and their insurance company from their long-term obligation to you. They will permanently be off the hook concerning your benefits. This means that a settlement agreement is, essentially, an exchange between the injured worker and the insurance company – you exchange your right to benefits (in some cases lifelong benefits) for a sum of money. This is why it is important to consult an attorney about your individual case. If your case is such that giving up long term benefits is advantageous, then it may be advisable to settle, otherwise you may not want to settle and give up your right to claim compensation in the future.