A settlement is essentially an agreement between you and the workers’ compensation insurance company whereby the insurance company pays you a certain amount of money to forego any future workers’ compensation benefits and close your case. In other words, the insurance company buys your case from you.

So, why would an insurance company be interested in settling a workers’ compensation case?

To begin with, there are few things that you need to understand regarding workers’ compensation claims and workers’ compensation insurance companies:

  1. A workers’ compensation case is different than a personal injury case––where you can go to court and have a judge or a jury award you a certain amount for your entire claim. Your workers’ compensation claim may pay you a lump sum amount for permanent partial disability benefits, but there is no lump sum verdict for your entire case apart from negotiating a settlement with the workers’ compensation insurance company.
  1. All insurance companies are businesses and they are in business to make money. They make money from workers’ compensation by pooling insurance premiums from employers and then paying out as little as possible for their employee’s workers’ compensation claims.
  1. Insurance companies are also in the business of managing risk and can reasonably predict what an injury like the one you have suffered is likely to cost them.

So, when deciding whether to settle your claim or not, the insurance company will assess what your claim is likely to cost them with regards to the following factors:

  1. How much medical treatment they will likely have to pay for;
  2. How long you are likely to be out of work and how much that will cost them;
  3. How much partial disability they will have to pay you; and
  4. Any other money that they may be required to pay out on your case.

Based on these factors, the insurance company will come up with an estimate of what your case will cost them in the future. If they can settle your case for about the same amount or less than it would cost them if they were to leave your case open and continued to pay you benefits, they may find that settling your case a good business decision.

Insurance companies like to save money wherever they can. So, if they can save money by settling your workers’ compensation case, they will generally prefer to do so and––obviously––for as little money as possible.

Why is this important to know?

If you are thinking about settling your workers’ compensation case, you need to understand how the insurance company will evaluate your case.

You cannot simply hope to convince the insurance company that you need a certain amount of money because you have been through a lot of pain and suffering.

In fact, under New Jersey workers’ compensation law, pain and suffering is not something the insurance company has to pay you for.

The bottom line is that an insurance company is more likely to settle when your case will cost them a lot of money in future workers’ compensation benefits and when settling now will save them money in the long run.

Work With An Experienced Workers’ Compensation Attorney

If you are thinking about settling your workers’ compensation case, it can be helpful to have an experienced workers’ compensation attorney on your side. Especially, if you have any questions as to the value of your case. You should, at the very least, consult with a workers’ compensation attorney to find out if and how they can help you settle your case for the most amount of money possible.