What is a Workers’ Compensation Settlement?
The US Bureau of Labor Statistics states that 2.8 million workplace injuries and illnesses occurred in the year 2019. Workers’ compensation settlements enable employees to claim benefits during work-related injuries to pay for the lost wages, medical expenses, and more.
The worker’s comp insurance processes may differ from state to state. Workers’ comp insurance policies are meant to protect employers from employees lawsuits should they be injured at the workplace. It aims to protect the injured worker by covering costs such as:
- Lost wages or a portion of income
- Medical treatment or disability payments
- Future medical expenses
In this article, we will discuss everything you need to know about workers’ comp settlement.
How the Workers’ Compensation Process Works
Both employers and employees play a vital role in the worker’s comp settlement process. As mentioned earlier, the process is different in different states. In the case of a work-related injury, the claim is presented before the insurance carrier, who accepts it and offers a certain reimbursement amount.
The decision to accept the approved amount of compensation belongs to the employee. If the employee feels that the compensation amount is not justified and wants to seek a higher settlement, they can hire a lawyer and move to court.
1) Get the injured worker medical treatment
Despite having the best security measures in place, employees can suffer injury. If the employer learns about the injury at the initial stage, the employee must get proper medical care. The injury might occur when the employer is not around and in that case, the employee must notify the employer about their injuries.
When the employee is under medical care, the employer must follow up. Small business owners must take care of the medical expenses, monitor employees’ recovery, and enquire about the process to claim medical benefits with the insurance company.
2) Document the accident for the insurance company
The employer must investigate the workplace injury, whether or not it takes place before them or in their presence. The employer can even ask the employee to write a note to acknowledge injury along with a written account from a witness.
The note can include information about what happened to the injured worker at the workplace. The information from the witnesses is valuable and may help uncover what actually happened. Taking pictures of the location where the injury happened might help unearth the loopholes that contributed to the incident.
3) File a workers’ compensation claim
The final, yet most important step is to file a worker’s compensation claim with the guidance of the insurance company. While you file a claim don’t forget to offer your injured employer the overall medical costs.
Insurance companies must guide you through every stage of the process to help you file and document the case correctly. In short, filing a claim is the best way to protect the employer’s and the employee’s rights, even if the injuries seem to be minor.
What to Expect if the Comp Case Goes to Court
In the event that a worker’s comp lawsuit goes to trial, the judge will evaluate various aspects of the case to determine if it is valid. On reaching the conclusion and determining the appropriateness of the case, the judge will propose a fair settlement amount.
After the court decides a settlement amount, both the parties, including the insurer and the employee, can act in accordance with the decision. Alternatively, if the parties feel that the settlement amount is lower than what is expected, they may re-appeal the whole settlement. If the insurance company accepts the settlement amount right away, the case is deemed settled outright.
Types of Workers’ Compensation Settlements
Workers’ comp settlements claims can be settled in two ways—lump sum payments and structured settlements.
Lump Sum Settlement
In lump-sum settlements, the employee gets a one-time payment (lump-sum) from the insurance company or the employer after signing the settlement agreement. It should be noted that a single payment format may not be sufficient when medical bills become too big.
The employees may opt for lump-sum payments if the injury is minor and does not require regular visits to the physician.
In the structured settlement, the injured employee receives partial payout checks, such as medical payments and wage losses, either on a weekly or monthly basis or as deferred payments. Usually, the employees prefer this option as it helps to maintain the cash flow for a fixed period of time.
With structured payments, employees compromise their future right to claim wages in return for receiving a lesser pay off each month.
In the case of structured settlements for permanent disability payments, the employee may choose to hold the settlement offer until they reach MMI (Maximum Medical Improvement).
Regardless of what option you select for the worker comp settlement, the injured worker must seek legal advice for understanding the payment structure. This will help in making an informed decision and picking the right plan for maximum coverage and workers’ compensation benefits.
What to Do Before the Settlement Agreement
Before signing a workers’ compensation agreement, the insurance company and injured worker must calculate the payments and disability benefits (if required) to make a wise decision. There are a few things that you must consider carefully.
Examine all the aspects to understand if you can handle the case in a better way or if you need to hire a legal representation lawyer. Although it’s not mandatory to hire an attorney, going forward with this option is recommended for achieving the best outcome for your case.
You should check your case with a lawyer who possesses a good track record in negotiating with insurance companies, as having just the certification or licenses is not enough. An experienced lawyer with accessibility to similar workers’ comp claims would be able to handle your case more proficiently.
Make sure that you understand all the terms and conditions of the agreement along with how payments will be made. This will help resolve any future conflicts quite easily if they appear. Ask for recommendations from the employees who have hired workers’ compensation attornies before and ask for their contact information.
Get Your Workers’ Comp Settlements Handled Through Contractors Liability
Workers comp settlement seems to be a simple matter, but you need to understand it carefully, else it can turn into a stressful legal battle. Contractor’s Liability insurance agents can help you file workers’ comp claim settlements and get the best future benefits you deserve.