The determination of a lump-sum agreement designed to resolve a workers’ compensation case involves evaluating several factors. These typically include the severity of the injury, the worker’s average weekly wage prior to the injury, anticipated future medical expenses, and the degree of permanent impairment resulting from the work-related incident. For instance, a settlement for a back injury resulting in permanent restrictions on lifting and prolonged pain management would differ significantly from one for a fully recovered broken arm.
Reaching such an agreement offers finality and closure for both the employee and the employer/insurance carrier. For the employee, it provides a sum of money that can be used for various purposes, such as medical care, job retraining, or supplementing lost income. For the employer or insurance carrier, it eliminates the uncertainty of ongoing medical costs and indemnity payments. Historically, these agreements were less common, but their use has increased over time as a method to efficiently resolve claims and reduce administrative burdens.
