Workplace accidents happen when they are least expected. If you are hurt at work, you may be entitled to financial restitution for the resulting damages through your employers’ workers’ compensation program. Depending on the outcome of the claim, you may choose a one-off payment (also known as a lump sum settlement) or a structured settlement.
As the name suggests, a lump sum settlement is a single payment that covers your medical expenses as well as other damages. This settlement is made once so you manage the amount on your own.
So what does a lump sum settlement cover?
A lump sum settlement may take care of your economic losses to date (that is medical expenses as well as lost wages). Depending on the nature of your injury, it may also take into account future medical costs. The lump sum settlement is usually made after a prognosis of your injury by a doctor.
Potential drawbacks of a lump sum settlement
When you accept a lump sum settlement, the insurance provider will require you to sign the paperwork indicating that you forfeit the right to make additional claims regarding your injuries in the future.
Thus, should your injuries require additional attention, say surgery or physical therapy, you cannot get back to the insurance company for additional compensation. If your injury requires additional care, you will have to meet this cost on your own.
Things to consider when negotiating a settlement offer
When the insurance company offers a settlement, it is in your best interest that you look at the bigger picture. Here are important questions you need to ask when accepting a settlement:
- Will the settlement sufficiently cover your current and future treatment costs?
- Will you be able to get back to work or engage in an income-generating activity?
- Will you be entitled to any other benefits should you turn down the lump sum settlement?
The decision to accept a lump sum settlement following a workplace injury is entirely yours to make. Find out how you can safeguard your rights and interests while litigating a workers’ compensation claim.