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For Injured Workers

Lump Sum Settlements

Often, injured workers must decide whether it is in their best interest to accept a lump sum settlement. Employers’ insurance companies may offer injured workers a compromise and release in Pennsylvania. It is important for employees to understand the pros and cons of lump sum settlements before signing one or agreeing to anything in their case.


Philadelphia Workers’ Compensation Lawyers at Larry Pitt & Associates, P.C. Negotiate Fair Lump Sum Settlements

If you need an attorney, contact a Philadelphia workers’ compensation lawyer at Larry Pitt & Associates, P.C. We can evaluate your claim, ensure that your rights are protected, and help you determine whether accepting a lump sum settlement is in your best interest. For a free consultation, contact us online or call us at 888-PITT-LAW. Larry Pitt & Associates helps throughout:

Implications of Signing a Compromise and Release Agreement

Insurance companies often approach workers with lump sum settlements for less than the true value of their claim. Those who agree will receive either a one-time, lump sum amount or a structured settlement instead of the typical weekly or bi-weekly benefits. In Pennsylvania, compromise and release agreements may only be reached after a worker has been out of work due to their injury for four months.

Workers may agree to settle their medical expenses, wage loss benefits, or both. However, in doing so, they give up their right to future compensation and perhaps additional benefits they may have obtained through litigation. Considering these high stakes, it is advisable to contact an experienced workers’ compensation lawyer to see whether a lump sum settlement is the best choice for you.

Benefits of Agreeing to a Lump Sum Settlement

In many cases, it is not advantageous for workers to accept lump sum settlements. For example, those who require future medical care, or who will be out of work for a long time, may be left with inadequate funds to cover their costs. Workers whose conditions are likely to worsen over time or lead to other conditions may not be left with enough money to pay for future medical expenses.

However, there are circumstances in which it may be in a worker’s best interest to agree to a settlement. For example, accepting a lump sum settlement may be advantageous if a worker:

  • Has reached maximum medical improvement (MMI)
  • Has been receiving benefits for more than 90 days
  • Does not wish to go to court
  • Believes they can manage the money responsibly over time
  • Wants closure as soon as possible
  • Would rather receive a one-time lump sum than periodic payments

workers’ compensation judge must approve all lump sum settlements and will make sure a worker understands the terms of the agreement prior to approval. However, assessment of the agreement’s fairness is largely left up to the worker and their attorney. Approved settlements are considered full and final, meaning that workers waive any claims to lifetime benefits and may not reopen their claims in the future.

Lump Sum Settlement Amounts

In Pennsylvania, workers may agree to either a lump sum settlement or a structured settlement. Those who agree to a lump sum settlement will receive a one-time payment, whereas workers who have a structured settlement will receive payments over time, according to a pre-determined schedule. The amount a worker receives depends on several factors, including their:

  • Pre-injury wages
  • Injury severity
  • Ability to return to work
  • Evidence to support the claim

Workers may need an attorney to help them determine the fair value of their claim and decide whether a lump sum settlement is the best option in their case. Consult with a local, qualified attorney as the laws on workers’ compensation vary by state.

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