Worker's compensation is a compulsory alternative to the tort system for employers and employees. This means if you are an employee and worker's compensation legislation applies to your employer (and it does to most employers who have one or more workers), you are required to collect damages from work injuries using worker's compensation. When you settle a worker's comp claim, this means that you agree to accept a monetary amount for your damages offered by the worker's compensation insurance company as a full satisfaction of your rights.
Check with your state's Department of Labor to research and understand your rights in your state. State law governs worker's compensation. Most employers are covered by worker's comp, which means in most states, your recovery for a work injury is limited to the amount of money you are entitled to under worker's compensation. So, if you settle a claim, you cannot later go back and sue your employer to get more money for your injury. You need to understand this right, as well as the worker's compensation and appeals process in your state.
Receive or request a settlement offer. Generally, worker's compensation in most states follows a prescribed format. When you are injured, your must obtain medical help within a set period of time--often from a company-approved doctor. The doctor will evaluate your injuries. Your employer will file notice of a worker's comp claim with the company's insurer and the insurer will request proof of your injury and proof of wages. The insurer will then either approve or deny your claim. If the insurer approves your claim, you will receive a letter dictating the amount of money the insurer will pay out under the claim. If the insurer denies your claim, you will receive a letter to that affect and you may follow the appeals process set forth by your state. A settlement is most often a term used to refer to an offer that comes when worker's comp liability is disputed. In other words, the insurance company will offer you a "settlement" amount for you to relinquish your right to appeal a denial of a worker's comp claim.
Review the amount in the settlement offer to determine if it is fair and/or if it covers the expenses you need it to cover. State law sets forth the appropriate levels of compensation for work injuries. Many states have a "schedule of injuries," which means that you are entitled to a set amount of money for each injury you incur. An injury that causes blindness or results in a limb being amputated, for example, entitles you to a certain amount of money. In other states, the amount of money you are awarded depends on the level of severity of your injury as evaluated by a doctor according to a scale describing various levels of impairment. Make sure you review these schedules to determine whether the amount of money the insurer offers you is fair in light of what you are entitled to under the law. Often, having an attorney review the offer is wise.
Send notice that you accept or deny the settlement. If you accept the settlement, you will generally have to sign official legal forms waiving your continued rights to a claim. These forms will stipulate that the settlement is full satisfaction of your claims and that you cannot later appeal the worker's compensation award or sue. The letter will normally be signed and notorized, and witnesses may be required. Upon signing the letter, you will normally receive the damages amount specified in the settlement agreement. If you appeal, then you will not be settling the claim but instead you will be requesting that a review board (an administrative board set up by the state's workers compensation system) review your claim to determine what is fair.
- Even if your employer was not negligent in causing your injury, you are still entitled to recover damages set forth by worker's compensation legislation because the system is a no-fault system. Don't sign a settlement form or agreement without understanding these rights fully.
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