The Difference Between Workers’ Compensation Benefits and Settlements

Injured workers tend to view workers’ compensation settlements in one of two ways. Either they see them as good because they guarantee a lump sum over the uncertainty of compensation through litigation. Or, they see them as bad because they remove the chance of receiving more compensation than expected through litigation. In reality, settlements are a mix of both. They guarantee some things, such as a lump sum payment. But in return, other benefits you would receive via workers’ compensation are given up.

Compromise and Release Agreements

Workers' compensation lawyer

Settlements are formally known as Compromise and Release Agreements in Pennsylvania. This is because you and the insurance company come to a compromise regarding the amount you should be paid, and then the insurance company is released from its additional financial obligations relating to your case. The insurer will no longer have to pay for future lost wages, medical treatments, prescriptions, or anything else associated with your injury unless they agree to do so as part of the compromise. For this reason, it is very important to decide whether a settlement is truly the best thing for your situation.

A workers’ compensation attorney can help you figure out what exactly you would be giving up if you accept a settlement offer from the insurer.

Settlements can be very Flexible

voluntary mediation

In any settlement, you are going to be giving up something in return for a guarantee of something else. However, what exactly you give up and what you retain in a settlement depends on what you and the insurer can agree on. For example, a settlement may include a lump sum payment and an agreement that the insurer will continue to pay for your prescription medication. Or, your settlement payout could be structured as an annuity rather than a lump sum.

Settlements are not as black and white in regards to what they include and exclude as most injured workers believe them to be. They are also voluntary. No one can force either party to settle.

Are Settlements Final?

All settlements are final once a workers’ compensation judge signs off on them. Before doing so, the judge will make sure that you understand what benefits you are giving up and what you are getting in return. Ultimately, you will be unable to reopen your claim or otherwise seek further compensation from your employer or their insurance once a settlement has been approved.

Hillsberg Law

My name is Geoffrey Hillsberg, and I have been solely practicing workers’ compensation law in the State of Pennsylvania since 1995. If you have been injured on the job, please contact my law office today. I will fight for your right to compensation after a workplace injury.


The advice offered above is general in nature and may not be applicable to every case. Consultation with an attorney is highly recommended. Reliance on this advice does not represent the formation of an attorney-client relationship in the absence of a fee agreement with Mr. Hillsberg.