Many workers’ compensation claims settle in the end, and there are several things to know before you get to that point in your claim.

Don’t get pushed into a settlement. Insurance companies are known for making artificial deadlines for accepting a settlement. It’s meant to make you panic and accept a settlement offer that is either low or premature. The main guiding force for a settlement should be the status of your health. If you settle before you are fully recovered and then something in your recovery goes wrong and causes a setback, you’ll have to foot the bill yourself. A settlement effectively ends your claim.


The settlement is a trade-off. You are agreeing to close your case and cut off your ability to get any further medical coverage from the insurance company. In exchange, the insurance company offers a lump sum of money. It’s impossible to know whether that sum is adequate if you are still undergoing treatment and have no clear idea of what medical care you might need in the future. Once you sign a settlement and the arbitrator approves it, your case is closed and cannot be re-opened. (Note that if you suffer a new injury, then you can file a new claim.)


You do not have to pay taxes on a workers’ compensation settlement. The entire amount is tax-free and you do not need to report it. You will come away with a settlement contract in case you ever need to prove where your settlement money came from. Also, settlements are public information, which worries some people. However, it takes a lot of effort for someone to learn all the details. They would have to care a lot, and that’s not very likely in most cases.


Even if you fully recover from your injury, you can still get a settlement. The insurance company still benefits from knowing that you are foregoing all future medical benefits. This might not be true if you had a very minor injury, however. The value of any case depends on the medical records, the opinion of your doctor, your wages, and several other factors.

If you don’t want to settle, you don’t have to. The other option is to go to trial. This is the recourse you have if the insurance company is not offering a fair settlement. It’s also a way to keep your medical benefits open. If you go to trial and win, your medical benefits can remain open for any future care you might need. Deciding whether this is the right way to go is best done with good legal advice. The risk of going to trial is that you could lose.


The settlement of your claim signals the end of an ordeal that you’re probably eager to put behind you. However, don’t rush into anything you don’t fully understand.