A Guide to Assessing Settlement Values in Workers Compensation Claims

 

Breaking Down the Workers Comp Settlement Ranges by Injured Body Part, Accident Type, and Occupational Disease

 

You are negotiating a workers compensation settlement blindfolded.

 

Your opponent – insurance companies such as Travelers, Liberty Mutual, and The Hartford, and third-party administrators such as Sedgwick CMS and Gallagher Bassett – has data from tens of thousands of claims. They know the average cost per claim depending on the body part injured, your age and education, and dozens of other variables.

 

To know if a settlement offer is good, you need access to the data insurers, claim adjusters, and defense attorneys use to determine average workers comp settlement amounts for cases with similar bodily injuries and factors. But you will not get it. At least not from the insurance carrier.

 

And the insurer uses this information mismatch when trying to settle a workers compensation case.

 

I wrote this article, and the others on this website, to counter the insurers’ advantage during litigation and negotiation.

 

The guidelines below, including the workers comp settlement chart for specific injuries and conditions, data on average payouts, and tips for calculating a fair figure, are the first point of reference for attorneys and claimants trying to figure out a case’s worth. I base them on results I have obtained for injured workers like you, reviews of reported settlements, and countless hours spent negotiating with insurers directly and in mediation.

 

Please use these recommendations to do the following: 

 

• Write a settlement demand letter that persuades,

 

• Evaluate offers,

 

• Make counterdemands (never accept the first offer), and

 

• Get a workers comp settlement that provides financial security and decreases stress.

 

You only get one shot at negotiating a payout that could have lifelong consequences.

 

If you have questions about workers comp laws in Virginia, complete our online contact form or call me at (804) 251-1620 or (757) 810-5614. 

 

My law firm has negotiated millions of dollars in workers compensation settlements. And we want to get more for you.

 

 

What is a Workers Compensation Settlement?

 

A workers comp settlement is an agreement to end part or all of your claim for a lump sum of money and other terms. 

 

You, your pre-injury employer, and the employer’s insurance carrier (or claim administrator) must be parties to the workers compensation settlement contract for it to have force. 

 

What are the Types of Workers Comp Settlements?

 

Workers comp settlements fall within one of these categories:

 

Full and Final Settlement

 

The most common type of workers comp settlement is the “full and final” settlement.

 

A “full and final” settlement is an agreement to end all parts of your case (including claims for wage loss, compensation for permanent partial disability, and medical expenses) if you receive a cash payment.

 

Full and Final Settlement plus the Funding of a Medicare Set Aside (MSA)

 

The Medicare Secondary Payer Act (MSP) requires all parties in a workers comp case to protect Medicare’s interests when the settlement includes the cash buyout of future medical expenses.   

 

The preferred method to protect Medicare’s interests is a Workers Compensation Medicare Set Aside (WCMSA). 

 

A WCMSA is an agreement to allocate a portion of a workers compensation settlement to pay for future medical services related to the work injury or occupational disease. You must use these funds to pay for treatment related to the occupational injury or illness before Medicare steps in and covers your care. 

 

This settlement type means the insurer will pay a lump sum of money plus fund a WCMSA. 

 

The Centers for Medicare and Medicaid Services (CMS) review of the WCMSA amount may be necessary, depending on the settlement amount and your Medicare status. 

 

Indemnity Only/Open Medical Settlement

 

The parties may agree to settle only the indemnity portion of the case, leaving the lifetime medical award intact. 

 

This type of settlement is called an “open medical” settlement. 

 

You give up your right to receive the following types of workers compensation benefits if you accept an “open medical” settlement:

 

• Temporary Total Disability (TTD)

 

• Temporary Partial Disability (TPD)

 

• Permanent Partial Disability for loss of use or amputation of an injured body part (PPD)

 

• Permanent and Total Disability (PTD)

 

• Vocational rehabilitation services

 

But the insurer must continue to pay for reasonable and necessary medical treatment related to your work accident, which includes reimbursement for mileage expenses related to appointments. 

 

Structured Settlement

 

A structured settlement is an alternative to a lump sum payment settlement for releasing the insurer from liability. 

 

The insurer will buy an annuity from a structured settlement carrier if the parties use a structured settlement. 

 

This structured settlement carrier will then make periodic payments to you based on the agreed schedule. 

 

What is the Average Payout for a Workers Compensation Settlement?

 

Several organizations provide data on average workers compensation settlement amounts. 

 

For example: 

 

In 2021, the Virginia Workers Compensation Commission approved 4,839 settlements with a total aggregate value of $253,600,035. Therefore, the average workers comp settlement payout in Virginia was $52,407.53. 

 

For the accident years 2019-2020, the National Council on Compensation Insurance (NCCI) reported the average total incurred costs per claim were $41,353 ($22,377 in medical expenses and $18,976 in indemnity benefits).   

 

In 2019, the Joint Legislative Audit and Review Commission (JLARC) released a report with its findings of available workers comp data. 

 

JLARC analyzed claims involving compensable injuries and diseases in Virginia from 2014 to 2016. 

 

It found the parties had settled 8,083 claims (19 percent) within the first two years after the date of injury. 

 

The average workers comp settlement amount was $32,093, with a median payout of $13,253 (meaning half of all the settlements were below this). 

 

JLARC’s analysis did not include contested (denied and disputed) claims resolved before a judge heard the evidence. Nor does the average amount reflect claims settled more than two years after the injury date

 

But these average settlement figures mean little.

 

Indeed, workers comp settlement payouts vary because so many factors affect value.

 

This article explains some of these factors after the charts with average settlement amounts by body part and injury type.

 

Workers Comp Settlement Chart - Average Payout Ranges by Body Part and Injury Type

 

The data in the third column comes from the National Council on Compensation Insurance’s (NCCI) Workers Compensation Statistical Plan database. You can find this information on the National Safety Council’s (NSC) website.

 

In addition, you can discover more information about average payouts for your specific bodily injury by clicking on the hyperlinks in the chart and elsewhere in this article.

 

List of Example Workers Comp Settlement Amounts 

 

Sample ranges for workers comp settlements by body part and injury type help.

 

But detailed information on average payouts for injured workers in similar occupations is better.

 

Below is a chart with workers comp settlement results I have negotiated for injured employees like you.

 

But first, I have to include this disclaimer:

 

THE VIRGINIA STATE BAR RULES OF PROFESSIONAL CONDUCT REQUIRE ALL ATTORNEYS TO MAKE THE FOLLOWING STATEMENT AND DISCLAIMER TO THEIR CASE RESULTS: VIRGINIA WORKERS COMPENSATION SETTLEMENTS AND VERDICTS IN ALL CASES DEPEND ON VARIOUS FACTORS AND CIRCUMSTANCES WHICH ARE UNIQUE TO EACH CASE. THEREFORE, PAST RESULTS IN CASES ARE NOT A GUARANTEE OR PREDICTION OF SIMILAR RESULTS IN FUTURE CASES THAT I MAY UNDERTAKE.

 

• $4,250,000.00 for a paraplegic.

 

• $3,500,000.00 as co-counsel in a third-party case arising from a workplace injury. The details are confidential.

 

• $1,850,000.00 plus in medical benefits and a lump sum settlement for a day laborer who suffered multiple injuries in a work-related motor vehicle crash.

 

• $1,250,000.00 for a non-English-speaking roofer who fractured his spine after falling more than 15 feet. He had temporary paralysis (paraplegia) that resolved, but he continued to have trouble standing or walking without crutches. In addition, the spine injury resulted in a neurogenic bladder and an increased risk of urinary tract infections (UTIs). This settlement equaled the present value of wage loss benefits payable during the roofer’s expected lifetime plus the funding of an annuity to cover all Medicare-related medical expenses plus an additional $200,000.00 for non-Medicare-covered medical costs.

 

• $1,000,000.00 for a laborer at a logging mill who lost his arm (an amputation) when it got caught in defective machinery. He later developed PTSD. Initially, the insurance carrier tried to defend the claim by alleging that a safety rule violation caused the injury. But it ultimately caved and accepted the claim. The parties negotiated the settlement while the employee continued to receive benefits.

 

• $845,000.00 for a tractor-trailer driver who suffered a traumatic brain injury (a concussion), burns, and injuries to the arms and legs in a semi-truck crash. When the parties negotiated a settlement, the employer and insurance carrier had paid more than $500,000.00 in wage loss and medical benefits.

 

• $615,000.00+ in cash and medical benefits for a janitor who suffered a spinal cord injury in a slip and fall accident.

 

• $550,000.00 for a sales representative who injured his low back in a work-related car crash. The employer accepted the claim, and the Workers Compensation Commission entered an Award. Then the parties negotiated a settlement after the employee reached maximum medical improvement (MMI) and just hours before a scheduled mediation settlement conference would begin.

 

• $448,000.00 for a delivery driver who injured both knees when he stepped in the space between the rear of his truck and the loading dock, falling. The parties negotiated this settlement after the insurer had paid more than $200,000.00 for medical care, including a total joint replacement, and more than $73,000.00 in indemnity benefits.

 

• $445,000.00 for a flight attendant who injured his shoulder and neck (cervical spine) when the pilot slammed on the brakes during taxiing while the flight attendant performed a safety demonstration. The pain and reduced mobility from these injuries caused depression, which the Workers Compensation Commission found to be a compensable consequence of the initial workplace accident after a trial. This settlement helped the flight attendant decrease the offset (reduction) of monthly Social Security disability insurance (SSDI) payments due to workers comp benefits, putting more money in his pocket.

 

• $430,000.00 for a heavy materials handler who injured his knee, back, and shoulder when lifting a heavy object. The defendants had several procedural defenses (such as the statute of limitations, failure to give timely notice, etc.) but recognized they might lose at the workers comp hearing.

 

• $380,000.00 for a delivery driver with a Teamsters Local Union who suffered multiple injuries while performing his job. The settlement included a lump sum payment, the professional administration of a WCMSA funded by the employer, and terms to protect the employee’s union pension benefits.

 

• $320,000.00 for a maintenance technician who suffered a rotator cuff tear in the shoulder, preventing him from returning to his regular occupation.

 

• $312,000.00 in cash and medical expenses for a dog groomer who suffered nerve damage from a dog bite

 

• $300,000.00 for an airplane pilot who suffered a herniated disc injury and cauda equina syndrome when lifting a heavy item through the security line in an airport terminal. In addition to a lump sum payment, the settlement included terms to help the pilot receive more long-term disability benefits through an employer-funded disability insurance program covered by ERISA.

 

• $300,000.00 for a delivery driver who fractured both feet when a makeshift loading dock collapsed on his first day of work. The parties negotiated a settlement after the employee underwent multiple surgeries and received home health care and wage loss payments at the insurer’s expense. Fortunately, the employee returned to light-duty work driving a taxi after settling the case.

 

• $295,875.00 for a construction worker who hurt his back at the job site and needed spinal fusion surgery. The parties negotiated this settlement after the insurer had paid for the surgery and time missed from work.

 

• $292,000.00 for a diesel mechanic who suffered a shoulder injury when performing work on the highway.

 

• $291,000.00 for a laborer with neck and shoulder injuries.

 

• $285,000.00 for a construction worker who suffered multiple upper body injuries.

 

• $276,000.00 for an engineering and infrastructure company employee who injured his back when lifting a heavy object.

 

• $270,000.00 in cash and medical benefits for a shipyard worker who suffered a shoulder injury.

 

• $255,000.00 for a stocker who injured his knee when he slipped and fell on the job.

 

• $250,000.00 for a union electrician who re-injured his back when lifting two buckets filled with drywall on a job site. The employer defended the claim, alleging that the employee’s need for surgery was related to preexisting conditions such as degenerative disc disease, not the recent injury. Despite having undergone two past back surgeries, we won at trial. And the employee received benefits for several years before settling the claim.

 

• $250,000.00 for a delivery driver who injured his ankle (including the Achilles tendon) when fixing a vehicle. After some negotiation, the employer accepted the claim and paid for multiple surgeries and time missed from work. Then the employer and its insurer paid a settlement after the employee returned to light duty.

 

• $250,000.00 for a delivery driver who suffered multiple injuries in multiple accidents while loading and unloading furniture.

 

• $248,000.00 plus lifetime medical expenses for a state government employee who suffered multiple injuries in a motor vehicle crash. The parties negotiated this settlement after the employer had paid 500 weeks of wage loss and stipulated the payment of permanent and total disability (PTD) benefits. In addition, the employer must continue to pay for reasonable and necessary health care related to the work accident.

 

• $245,000.00 for a maintenance worker who injured his back when he fell from a ladder.

 

• $243,000.00 for a flight attendant who damaged her cervical spine during an in-flight incident.

 

• $225,000.00 for a nurse who developed CRPS/RSD after a patient fell on her arm.

 

• $218,000.00 for a security guard who suffered multiple injuries when he wrecked his motorcycle in a parking deck at work. He returned to light-duty work with a new employer after settling this claim.

 

• $217,500.00 for a store manager who hurt her back while lifting.

 

• $200,000.00 for a restaurant employee who injured her back when lifting a heavy item.

 

• $190,000.00 for a flight attendant who contracted reactive airway disease (an occupational disease) after exposure to toxic fumes and irritants on a flight. As part of the settlement, the employee kept the benefits available under her labor union’s collective bargaining agreement (CBA), including flight benefits.

 

• $179,000.00 for a warehouse worker who injured his lower body in a slip and fall.

 

• $176,000.00 for a welder (metal worker) who suffered a crush injury to his foot when working on a bridge near the Chesapeake Bay. After settling this claim, he recovered enough to return to work for a different construction company.

 

• $175,000.00 for a trucker who hurt his back in a single-vehicle tractor-trailer crash caused by snow and ice. The insurance carrier denied the claim, forcing litigation. However, we won at trial and on appeal before the Full Commission. After paying wage loss replacement and medical benefits for more than one year, the insurer made a settlement offer, eventually increasing to $175,000.00.

 

• $175,000.00 for a utility lineman and union electrician who hurt his back when using a hammer hanging from the side of a tall electric transmission tower. The claim was settled after we won at trial on whether the insurer had to authorize and pay for additional surgery it had denied.

 

• $172,000.00 for a construction worker who suffered multiple injuries to his back, neck, and legs when he fell while lifting a heavy object. The case was settled at mediation when the employee was under an open award for temporary total disability (TTD) benefits and lifetime medical treatment. After settling his claim, he returned to the labor force and used some funds to start his own company.

 

• $170,000.00 for an order picker/selector who injured his arm while using a forklift. The employer offered a settlement after paying more than $75,000.00 in indemnity and medical benefits.

 

• $168,000.00 plus the funding of a WCMSA for a construction worker who injured his neck and shoulder.

 

• $166,000.00 for a trucker who tore his ACL and meniscus and injured his ankle when he tripped and fell.

 

• $157,000.00 for a construction worker who injured his neck in a motor vehicle crash.

 

• $155,000.00 for a truck driver who broke his leg when an object fell from a height and struck his knee. The claim was settled after he underwent surgery at the insurance carrier’s expense and was released to modified duty work at the medium exertional level.

 

• $155,000.00 for a nurse who injured her cervical spine when moving heavy diagnostic equipment in a hospital.

 

• $153,000.00 for a delivery driver who hurt his back and knees when lifting a heavy box. He kept his company pension under the settlement.

 

• $151,000 in total benefits and a lump sum settlement for an ammunitions plant employee who suffered a hand injury.

 

• $150,000.00 for a trucker who hurt his hand in a tractor-trailer crash caused by another driver’s negligence and developed chronic regional pain syndrome (CRPS) affecting his arm. The claim was settled after his doctor released him to light duty.

 

• $150,000.00 for a truck driver who hurt his neck and shoulders when he fell while loading his truck.

 

• $150,000.00 for an airline employee who suffered a rotator cuff tear affecting her dominant arm. The employer settled the claim after paying more than $200,000.00 in various other benefits.

 

• $150,000.00 for a maintenance technician who injured his neck and shoulder. The employer and insurer settled the claim after paying for surgery.

 

• $147,500.00 for a trucker who injured his shoulder when opening a trailer door. The employer and insurer settled this claim after paying wage loss benefits voluntarily and covering surgery for a torn rotator cuff.

 

• $142,500.00 for a grocery store distribution worker who injured his lower back when lifting a heavy object in a warehouse.

 

• $140,000.00 for a flight attendant who hurt her back and shoulder when turbulence threw her into the side of the airplane. She later suffered an ankle injury when she fell because of a change in her gait brought on by the back injury.

 

• $130,000.00 for a plumber who injured his hand, wrist, and several fingers (including the thumb) when working at a commercial site. He required multiple surgeries, each of which was paid for by the insurance carrier, and he settled his claim after he reached MMI.

 

• $130,000.00 for a construction worker who hurt his left knee in a slip-and-fall accident.

 

• $128,000.00 for an auto mechanic who suffered a left knee injury. The claim was settled when the orthopedic surgeon released him to light duty.

 

• $125,000.00 for a flight attendant who injured her knee but had been released to full duty.

 

• $125,000.00 for a retail worker who suffered a concussion in a slip and fall. The employer settled the claim after making wage loss payments and covering medical expenses.

 

• $120,000.00 in cash and medical care for a food service professional who suffered non-surgical injuries to the Achilles Tendon and leg.

 

• $110,00.00 for an employee at a chemical factory who suffered a head injury and hurt his back on the job.

 

• $108,000.00 for a tractor-trailer driver who injured his shoulder when performing a pre-trip inspection.

 

• $107,500.00 for a factory employee who suffered a concussion and neck injury and fractured her foot in a fall.

 

• $102,500.00 for a customer service agent who hurt her back when lifting luggage.

 

• $100,000.00 for a maintenance worker who suffered a head injury after falling from a ladder.

 

• $100,000.00 for a property manager who fell in a hole and hurt her leg.

 

• $90,000.00 for a fast-food store manager who hurt her ankle when helping a customer with an order in the store’s parking lot.

 

• $90,000.00 for a chef who suffered a wrist injury while lifting a heavy item.

 

• $77,000.00 in cash and medical care for a warehouse worker who injured her back.

 

• $75,000.00 for a healthcare worker who injured her elbow in the surgical operating room.

 

15 Tips for Calculating a Workers Comp Settlement Amount and Negotiating with the Insurance Company

 

No two cases are the same.

 

But the factors to consider when calculating a fair workers comp settlement payout remain the same from claim to claim.

 

Here are items to consider when deciding a reasonable range to settle for the body parts you injured:

 

Is Liability Accepted?

 

You are more likely to receive a reasonable settlement offer if the insurer agrees that your injury or occupational disease is compensable (in other words, an event covered by the Workers Compensation Act).

 

And if you have received a Workers Compensation Award Letter memorializing this acceptance.

 

The Award Order gives you leverage to negotiate a higher settlement amount because the insurer will have to jump through evidentiary and procedural hoops to stop your benefits.

 

What is the Likelihood I Will Win at Trial?

 

If the insurer has denied your claim, you must evaluate the evidence to determine the likelihood you will succeed at a workers comp hearing.

 

Similarly, you must assess the evidence to determine your chance of defeating an employer’s application for a hearing to stop benefits.

 

The insurance company’s settlement offers may reflect the strength (or weakness) of its defenses.

 

How Much Did I Earn Before the Work Injury?

 

How much workers comp pays in wage loss and permanent partial disability benefits depends on your pre-injury average weekly wage (AWW).

 

A higher AWW increases the insurer’s potential financial exposure for indemnity benefits, which affects the settlement payout.

 

Who Will Pay for Outstanding Medical Bills?

 

Your workers comp settlement payout should reflect who will pay for medical bills to date.

 

Generally, you can negotiate a higher settlement if the claim settles on a denied and disputed basis with no medical bills paid. Otherwise, the insurer can deduct these amounts from its claim evaluation as already paid.

 

But this is only a smart option if you have other ways to pay outstanding medical bills, such as private health insurance or Medicaid.

 

How Much Money Do I Need to Cover My Projected Future Medical Costs?

 

Your workers comp settlement amount should include monies for future medical treatment you may need related to the work injury because you will likely give up your medical award when you settle.

 

Examples of medical treatment the average workers comp settlement accounts for include the following:

 

• Chiropractic care

 

• Diagnostic imaging: Your doctor may order repeat MRIs, CT scans, or X-rays to track your progress throughout the years or diagnose additional problems.

 

• Doctor visits: You may need to see the physician several times each year, mainly if you receive pain management services, suffer frequent flare-ups, or aggravate or exacerbate the injury.

 

• Emergency Room (ER) visits if your treating physician is unavailable or sends you there.

 

• Home healthcare services from trained and licensed nurses

 

• Home modifications

 

• Medical devices: These devices include artificial arms, hands, feet, and legs, as well as crutches, canes, and wheelchairs.

 

• Mental health counseling

 

• Palliative care: Workers comp pays for healthcare that temporarily relieves your pain, such as acupuncture or massage.

 

• Physical therapy: Your doctor may prescribe physical therapy to recover from flare-ups or aggravations.

 

• Prescription medication

 

• Surgery: Operations such as spinal fusion, joint replacement, or hardware removal cost thousands of dollars.

 

Calculating how much your workers comp settlement should include for future medical expenses can be challenging. In addition to considering your current medical status, you must also try to predict your life expectancy and how much healthcare costs may rise over the next several decades.

 

Instead of estimating this amount alone, I recommend working with a life care planner to determine an appropriate amount.

 

How Will I Pay for Future Medical Treatment I May Need?

 

Having private health insurance can make settling your workers comp case more attractive.

 

Your attorney can include provisions in the settlement contract that trigger the anti-subrogation statute in the Code of Virginia. And other states may have similar anti-subrogation laws.

 

These terms allow you to (i) avoid reimbursing your health insurer for payments it made for treatment related to the occupational injury and (ii) continue using the private insurance for medical care after the settlement.

 

Do I Have Permanent Work Restrictions Preventing Me from Returning to My Pre-Injury Job?

 

Eventually, your physician (usually the orthopedic surgeon, pain management doctor, or neurologist) will declare that you have reached maximum medical improvement (MMI) for the work injury.

 

Then your physician will do one of the following:

 

• Release you to full duty,

 

• Give you permanent work restrictions, or

 

• Prescribe a functional capacity evaluation (FCE) with an impairment rating to determine your medical work restrictions and loss of use of the injured body part.

 

The average workers comp settlement amount is higher for workers who cannot return to their pre-injury work after reaching MMI because it allows the employee to seek and collect additional wage loss benefits. 

 

How Long Will I Be Out of Work with These Restrictions?

 

The estimated time it will take to find a job, given your permanent restrictions (residual functional capacity), age, education, geographic location, and work experience, has a role in your final workers comp settlement payout.

 

For example, you will likely have more difficulty finding a job if you –

 

• Are an older worker (age 50 and above)

 

• Can do only sedentary work

 

• Have a high school diploma or less

 

• Have a history of physical labor (such as working in an Amazon warehouse, driving a tractor-trailer, or nursing in a local hospital)

 

• Live in a rural area with few job opportunities outside of healthcare or manufacturing.

 

The longer it takes to find a new job, the longer you may qualify for wage loss benefits through workers comp. And this factor affects the settlement amount.

 

Do I Qualify for Other Disability Benefits or Kinds of Wage Loss Protection?

 

You may qualify for other disability benefits (such as Social Security disability insurance (SSDI), Supplemental Security Income (SSI), VRS, or long-term disability)) while receiving workers comp benefits. 

 

The relationship between these different systems is complex, with numerous regulations and laws determining how a workers comp settlement affects your right to the other benefits.

 

Your settlement payout should reflect how closing the workers comp case helps or hurts your right to seek and get benefits from these other systems.

 

Did I Injure a Scheduled Body Part?

 

The body part injured in the work accident determines whether you qualify for compensation for permanent loss of use.

 

In Virginia, for example, your occupational injury must affect one of the body parts listed in Code Section 65.2-503 to recover benefits for partial disability.

 

Other states have similar laws that may pay for whole-body impairment from work injuries.

 

Is My Permanent Impairment Rating Fair?

 

Your permanent impairment rating determines how much compensation you will receive for the permanent loss or loss of use of a scheduled body part.

 

A low rating will decrease the settlement amount.

 

So, make sure you get a second opinion if the rating seems off.

 

Am I Having Problems with Other Body Parts Because I Cannot Use the Injured Limb?

 

Workers compensation provides disability benefits and medical care for injuries and conditions due to the overuse of the non-injured body part because of the compensable work injury. This rule is called the compensable consequence doctrine.

 

For example, I have represented many injured workers who required left knee surgery due to overuse caused by a compensable right knee injury such as a torn ACL.

 

Your workers comp settlement amount should include monies for body parts you may add to the claim.

 

How Much Has the Insurance Company Paid Me (or on My Behalf)?

 

In Virginia, most workers comp cases are limited to 500 weeks of indemnity benefits.

 

Therefore, the insurance company’s financial exposure decreases as it continues to pay weekly wage loss benefits.

 

And the number of weeks potentially remaining affects the settlement amount in your workers comp case.

 

Will the Settlement Allow Me to Keep the Proceeds from My Third-Party Negligence Lawsuit?

 

You may have a civil action against the third party that caused your work injury. This claim is called a third-party action under tort law.

 

For example, suppose you suffered injuries in a work-related motor vehicle crash caused by a driver you have never met.

 

In that case, you can recover workers comp benefits through your employer’s insurance while filing a personal injury lawsuit against the negligent driver.

 

The workers comp insurer, however, has a lien against the proceeds from any auto accident settlement or verdict.

 

Therefore, your workers comp settlement amount may reflect the insurer’s agreement to waive any lien it has against the third-party action.

 

Generally, this means your workers comp settlement payout is lower.

 

But you will get more money because you do not have to repay a workers compensation lien from the proceeds of the third-party action.

 

What is the Insurer’s (or Employer’s) Settlement Policy?

 

Personalities matter in all aspects of life, including negotiating workers comp settlements.

 

Some insurers are pragmatic and practical and evaluate workers comp settlements fairly.

 

But other insurers, employers, and claim administrators are litigious, which affects the settlement payout offers.

 

An experienced attorney will know what you can expect from the claim adjuster or defense lawyer in your case.

 

Changes in the Value of Money Over Time: How Do the Present Value of Money and Cost of Living Adjustments Affect the Average Workers Compensation Settlement? 

 

Insurance carriers use a concept called “present value” to justify offering lower settlement amounts. 

 

But you can use the yearly cost of living adjustments (COLAs) allowed under the Workers Compensation Act to counter this argument.

 

Present value (also called the time value of money) is the idea that a dollar in your pocket today is worth more than a dollar promised in the future. That is because you can invest the money you have and earn interest.

 

The present value concept applies to workers comp settlements because the insurer pays income replacement benefits weekly and medical expenses as needed, but a lump sum settlement payment upfront.

 

Insurance carriers, therefore, will argue you should accept a lower settlement payout by telling you that you are better off getting the lump sum now rather than hoping to get weekly checks or medical benefits.

 

I agree – to an extent. There is a reason for the old saying: “A bird in the hand is worth two in the bush.”

 

But do not give the insurer an excessive discount on the settlement value of your case.

 

Instead, point out that healthcare costs have increased more than most other areas of the economy. And you may be entitled to more indemnity benefits if the Workers Compensation Commission finds you eligible for a cost-of-living adjustment. 

 

Hire a Lawyer That Has Negotiated Some of the Largest Workers Compensation Settlements in Virginia

 

You can try to negotiate a workers comp settlement alone, taking on the insurance company and its team of attorneys, claim adjusters, and doctors with data on thousands of past claims. 

 

Or you can call my firm at (804) 251-1620 or (757) 810-5614 or complete the online contact form and let us do it for you. 

 

We help you hold the insurance company accountable for your life-changing injury.