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Should you settle a workers’ comp claim?

When injured on the job, employees may be entitled to workers’ compensation benefits. But what happens when there is a conflict between the employer and employee regarding benefits or the ability to return to work?

Sometimes, employers may choose to settle a workers’ comp claim with their employee.

Lump sum payment or litigation?

Deciding whether to offer a lump sum payment for workers’ compensation can be a complex decision for employers. Here are some potential pros and cons to consider when making this decision:


  • Cost savings: Offering a lump sum payment can be more cost-effective than paying out a claim over a longer period, as it allows the employer to settle the claim for a lower amount than they might have paid in weekly benefits.
  • Avoid litigation: Settling a workers’ compensation claim through a lump sum payment can help avoid costly litigation and disputes that could take months or even years to resolve.
  • Control: With a lump sum payment, the employer has more control over the final outcome of the claim, as both parties agree to a specific dollar amount.


  • Higher settlement amounts: In some cases, employees may demand higher settlement amounts in order to agree to a lump sum payment rather than receiving weekly benefits. This can result in a higher overall payout for the employer.
  • Potential disputes: Even with a lump sum payment, there is still a risk of conflicts and disagreements between the employer and employee over the terms of the settlement agreement.
  • Lower employee satisfaction: Some employees may prefer receiving ongoing weekly benefits, especially if they cannot work and must rely on regular payments to cover their expenses.

When deciding whether or not to settle a workers’ comp claim, it’s important to weigh all of your options carefully before making a decision. Having invaluable guidance throughout this process can help you decide what’s best for you and your organization.

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