If you have a workers’ compensation claim in Florida, at some point you may face a decision: Should you agree to a settlement with your employer’s insurance company or take your case to a hearing before a workers’ comp judge? Most injured employees choose the settlement option, and there are often good reasons for that choice.
But accepting a settlement offer is a big decision. Before you sign an agreement, you should understand the general benefits and drawbacks of settling a workers' comp case, as well as Florida’s rules for workers’ comp settlements. You should also consider the specifics of your case, the right timing for a settlement, and how to evaluate a settlement offer.
What Rights Am I Giving Up in a Settlement Agreement?
Typically, a settlement agreement will provide you with a lump sum of money in return for a full release of liability—meaning that you give up all of your claims against your employer for your work-related injury or illness, including your right to any additional workers’ comp benefits.
When you agree to this type of settlement, Florida law doesn’t allow you to reopen your workers’ comp case. Even if your medical condition unexpectedly gets worse, you won’t be able to get reimbursed for further medical treatment or receive wage-loss benefits for additional time away from work.
Occasionally, insurance companies will agree to a more limited settlement. For example, the agreement might include a settlement of your claim for wage loss and rehabilitation expenses while still providing for payment of future medical bills related to your injury. But this type of agreement is rare; insurance companies much prefer settlements that end their obligation to pay any benefits.
Although settlements are most often paid in a lump sum, insurance companies will sometimes agree to so-called structured settlements, which provide a steady stream of income through scheduled payments. Many structured settlements also include an up-front payment for outstanding medical bills and other expenses. Typically, structured settlements are used in cases of catastrophic injuries or when employees need long-term care.
When Should I Settle My Workers’ Comp Claim?
Depending on some circumstances in your case, Florida has different rules for when you’re allowed to agree to a lump-sum settlement with a full release of liability. If you don’t have a lawyer, you may not sign this kind of settlement unless:
- the insurance company denied your claim, and a workers’ comp judge found that there’s a legitimate dispute about whether you’re entitled to compensation; or
- you’ve reached maximum medical improvement (MMI)—the point at which your medical condition has become stable and isn’t expected to improve further.
If you have a lawyer, you’re free to sign a lump-sum, full-release settlement agreement any time, whether the insurance company has denied your claim or is paying some benefits.
As a practical matter, though, it makes sense to wait until you reach MMI to agree to a settlement—especially one with a full release of liability—even if you have an attorney. Before you reach MMI, it might not be clear whether you’ll need additional medical treatment or whether you will have permanent limitations. That can make it difficult—or even impossible—to know whether a settlement agreement is fair.
How Much Should I Get in a Workers’ Comp Settlement?
Every workers’ comp claim is different; there’s no simple formula for deciding how much your case is worth in terms of a fair settlement offer. When you’re evaluating a settlement offer, you should consider several factors, including:
- whether you’re likely to need medical treatment in the future for your work injury, and the potential cost of that care
- whether the insurance company owes you any money for temporary disability benefits that it didn’t pay
- whether the insurance company owes you any penalties for late benefit payments
- the amount of any unpaid medical bills to date, and
- how much you should be able to collect for permanent disability benefits.
When there’s a major dispute about whether you’re entitled to benefits, you should also consider whether you have strong evidence supporting your claim—especially medical evidence.
A workers’ comp hearing is similar to a trial, and there’s always a risk that the judge will decide you aren’t entitled to any benefits. If there’s a good chance that you could lose your case after a hearing, you may be better off settling for a lump sum that’s lower than you think you deserve.
How Do Settlement Negotiations Work in Florida?
Either side can begin settlement negotiations. Typically, however, you or your lawyer will start the process by giving the insurance company a settlement demand. The insurer will respond by accepting the demand, rejecting it, or making a new offer in response (called a “counteroffer”). This negotiation process can continue until you agree on a settlement.
If the insurance company has disputed your right to benefits, Florida law requires that you go through mediation—an informal conference where a trained, neutral mediator will try to help you and the insurance company agree on a settlement. While mediation is not always successful, it can be a good stepping-off point for further negotiations after the mediation is over.
Getting a Workers' Comp Settlement Approved in Florida
If you don’t have a lawyer, Florida law protects your rights by requiring that you attend a settlement hearing with a workers’ comp judge. At the hearing, you’ll summarize your claim and your reasons for settling. You’ll also submit a series of signed forms, documenting the terms of your settlement and how your settlement will be distributed. (Learn what may be taken out of your workers’ comp settlement.)
The judge won’t approve the settlement if it doesn’t appear that the terms are fair, or that you don’t understand your rights under the law. A lump-sum settlement with a full release won’t be valid unless a judge has approved it or has found that the settlement amount is more than the value of the benefits you would be entitled to receive under Florida’s workers’ comp rules.
If you have a lawyer, you probably won’t have to attend a settlement hearing. Instead, you will sign a series of forms, and your lawyer will submit them to the judge. The judge only needs to approve the amount of fees going to your attorney.
You’ll usually receive your settlement payment within 14 days after the judge has approved the settlement or attorneys’ fees.
Getting Legal Help with a Workers' Comp Settlement
Settlements require a great deal of legal knowledge and skill. You must be able to decide how much money your claim is worth and negotiate effectively with the insurance company. You must also understand how to comply with all of the legal requirements, including complex federal regulations for setting aside part of the settlement if you’re likely to need medical treatment for the work injury when you’re eligible for Medicare.
Because of this complexity—and the long-term consequences of signing a settlement with a full release of liability—it’s usually in your best interest to hire an experienced workers’ comp lawyer to help evaluate settlement offers and negotiate with the insurance company. At the very least, you should consider having an attorney review any settlement agreement that you are thinking of signing.