The risks of a Compromise and Release after a serious job injury

On Behalf of | Feb 2, 2021 | Workers' Compensation

Workers’ compensation benefits often trickle in as you accrue bills. Your doctor’s office or physical therapist might even bill the insurance company directly. You can also rely on the workers’ compensation system for temporary disability benefits while you can’t work because of your injury.

For some people, the piecemeal process involved in standard workers’ compensation claims may seem frustratingly slow. It could be particularly difficult for those struggling to adjust to the reduction in income when receiving disability payments rather than standard wages.

Sometimes, workers can receive a lump-sum workers’ compensation settlement. In Pennsylvania, these are called Compromise and Release agreements. While it can seem like a great option for you, there is a noteworthy risk involved in a lump-sum benefit payout. 

When you accept the settlement, you lose the right to make future claims

A worker benefits from a Compromise and Release agreement because they receive all of the benefits they need at once, letting them pay off past-due bills or other expenses that don’t fit into their new budget.

Companies benefits because they don’t have the ongoing liability of an open claim. Instead, they make one payment and no longer have to worry about future medical costs or lost wages for that worker. The company actually stands to benefit substantially more than the employee in this scenario.

The injury might have worse implications for your job than you originally think. Employees who think they can go back to work sometimes only learn after their recovery that they can’t do the same job anymore. They could have a permanent reduction in their earning potential or may require additional care and surgeries that workers’ compensation now won’t cover.

You may need help reviewing a Compromise and Release offer

In some rare cases, workers can bring bad faith insurance claims against a company that manipulates them into an inappropriately low settlement. For most people, however, receiving a settlement will be the last compensation they get.

If you think that accepting a settlement is the best option for your workers’ compensation claim, you need to have a realistic idea about the financial impact of your injuries and a careful review of the settlement before you make any decisions or agree to any terms.