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The risks of accepting a settlement after a severe workplace injury
Nobody wants to get hurt at work — especially an injury so bad that it makes them miss multiple days or even weeks of income. Sadly, some workers do suffer catastrophic injuries on the job. The more severe the injury is, the greater the amount of benefits you will need.
Although workers’ compensation typically helps protect those who get hurt on the job, insurance companies still try to limit their risk and liability associated with a claim. If you have a severe injury and receive a settlement offer from the workers’ compensation insurance company, you need to be skeptical of that offer.
Is it a lump sum settlement or a structured settlement?
The first thing you need to determine is whether the offer is for a one-time cash payout or a structured settlement. Lump sum settlements can seem very tempting but can often put the recipient at a disadvantage. Not only are there tax implications to getting a large amount of money at once, but the lifetime cost of the injury may eventually far exceed the amount of the settlement.
A structured settlement, on the other hand, offers a specific amount of compensation at regular intervals. You will have money to rely on to replace your income and to cover your future medical costs, although you may have to budget carefully to cover all of them.
In both cases, you need to ensure that the amount offered reflects both medical costs, secondary expenses and lost wages. Talking with an attorney about your injury and settlement offer before you make a decision can help you maximize the protection you have when negotiating with an insurance company.