How Does Workers’ Compensation Settlement Benefit the Employee?

Workers Compensation

If an incident at work has caused physical injuries to you and the effects appear to be long-lasting, the workers’ compensation insurer at your workplace can provide you with permanent disability benefits. In case you do not agree with what the insurance company has decided to pay you, you can opt to either go for a hearing or a trial to let the court decide your fate or negotiate with the insurance company to decide on the desired settlement. This settlement is known as workers’ compensation settlement.

What Is Workers’ Compensation Settlement?

With regard to the workers’ compensation insurance, a settlement is said to have taken place when the worker decides to end a current compensation court case, thereby setting the company free from paying the ongoing weekly benefits and medical expenses in exchange for a set amount of money. The amount is a combination of the continuing benefits as well as medical treatment. Once the settlement is done and the case is closed, it can’t be re-opened.

It’s only if the judge recognizes that you clearly understand the terms of the settlement and that it works best in your favor will your settlement be approved.

What Are the Different Types of Workers’ Compensation Settlement?

The main categories under workers’ compensation settlements are:

  • Lump Sum Settlement: In this, an employee receives the money to cover the current and future medical costs all at once. The right to receive more money for the current injury is waived.
  • Compromise and Release Settlement: This is when an employee accepts the payment as full coverage of the claim, leaving them with no right to availing future benefits.
  • Structured Settlement: The conditions are similar to that of a compromise and release settlement, except that the employee receives the payments over a structured schedule.

What Are the Factors That Affect Workers’ Compensation Settlement?

The benefits you receive from the workers’ compensation settlement depend on a number of factors. Be it workers’ comp settlement in Mount Vernon or in Chicago, it will include the following factors:

  • After being injured at the workplace in a way that leaves you unable to continue working, you’re entitled to a weekly/biweekly check for lost wages. The money that the insurance company is required to pay you each week will depend on two factors, your average wages and the corresponding rate from the workers’ compensation.
  • The more serious your injury, the higher the compensation you will receive. If your injury completely prohibits you from returning to work, the weight of your case will likely increase.
  • If you’ve been injured in a manner that requires current and future medical treatment, your case becomes worth a lot more. Ongoing medication and physical therapy are equivalent to a jump in the settlement value.
  • The attorney you hire and the judge deciding your case can change a lot of things for you. Therefore, it’s crucial you choose an attorney who is well-versed in handling settlement cases.
  • A credible doctor can also help you win the case. Someone who testifies in your favor regarding the amount and benefits you’re supposed to receive from your claim will help sway the judgment in your desired direction.

How to Calculate Workers’ Compensation Settlement?

Before calculating the amount of your workers’ compensation settlement, obtain the necessary documents such as your accident report, medical records, and witness statements. It is best to wait until there’s a considerable improvement in your health so that the compensation you receive is fair and will cover all the expenses.

The final medical record will estimate as to how much of your body has healed and determined the compensation depending on the percentage of impairment. The higher the impairment and the longer the healing time, the more compensation you stand to receive. Gathering documents regarding your medical expenses will also help work out the settlement amount.

The calculation also considers the wages you’ve lost due to the injury as well as the physical loss such as impairment of a limb, hearing loss, and so on.

What Are the Advantages and Disadvantages of Accepting Workers’ Compensation Settlement?

When deciding whether or not to settle for the proposed workers’ compensation, several things need to be kept in mind. It’s best to weigh the pros and cons before making a decision.


  1. If the settlement amount is fair and you’re certain of the medical expenses your future will hold, it’s best to accept the proposed amount right away.
  2. Settling early on will save you from the physical stress of going to trial.
  3. Going to trial doesn’t guarantee that you will win the case. A settlement has fewer risks.


  1. The proposed amount doesn’t always compensate for all your losses. It is better to go to trial if you think the payment is insufficient.
  2. Settling means giving up the possibility of receiving money for future medical treatments that you may possibly need.
  3. A case settlement means having no rights to appeal the amount, whereas an award can be appealed at trial.

What Are the Benefits of Workers’ Compensation Settlement?

Some of the benefits an employee is entitled to under workers’ compensation settlement are as follows:

  • You will receive all the medical care you need to recover from the injury. This includes compensation for all the medical bills, prescriptions, and trips to the hospital.
  • If you need to take time off work due to the injury, you will receive temporary disability payments. Partial compensation for lost wages is included in this payment.
  • In case your injury leaves you unable to come to work at all, your company will have to provide monetary compensation for permanent disability. This happens if the injured isn’t able to compete anymore in the labor world.
  • Vocational rehabilitation is provided to those who aren’t able to return to their previous job. A partial income is given to the employee during this period.
  • After the employee returns to work, workers’ compensation benefits will be stopped if he/she is receiving equal or greater wages compared to the time before the injury. Wage loss benefits will be provided, at a lesser amount, if the employee is experiencing a wage loss due to the injury.

Frequently Asked Questions about Workers’ Compensation Settlement

Some of the most common questions regarding the workers’ compensation settlement are as follows:

Q1. What does Workers’ Compensation Settlement insurance cover?
A1. It covers medical expenses, lost wages, current care costs, and also funeral expenses.

Q2. What does Workers’ Compensation insurance not cover?
A2. It doesn’t cover injuries caused due to a fight started by the employee, the employee being intoxicated, injuries received intentionally, and emotional damages unrelated to workplace trauma.

Q3. How much will I get paid for Workers’ Compensation Settlement?
A3. This depends primarily on the degree of the injury and the extent of disability.

Q4. What factors are considered for Workers’ Compensation Settlement?
A4. The severity of the injury, future medical costs, your pre-injury wages, and your ability to work in the future.


Workers’ Compensation settlement is a fair deal that not only lets you afford the current medical attention you need for your injury but also handles any future expenses you may need to incur. Your lawyer should be able to guide you through this maze. If you have a strong case in your hand, it is best not to settle. But, if you want to save yourself the hassle of working through a long trial that may or may not end favorably, a settlement may be the best option for you.

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