When Will Workers’ Comp Offer a Settlement? (2025 Guide)

Workers’ Comp Settlement Basics

Workers’ compensation is designed to provide benefits to employees who are injured or become ill as a result of their job. Benefits are generally handled through an insurance provider that covers the employer’s workforce. Workers’ comp settlements are then paid out by the insurance company.

Settlements can take two forms: a lump sum or a structured settlement. A lump sum settlement closes your claim in exchange for a single settlement payment. By contrast, a structured settlement closes your claim in exchange for recurring payments over a set amount of time. The duration of a workers' comp settlement depends on various factors, including the complexity of the case and state-specific processing requirements. While some cases settle within a few months, others may take over a year.

States vary in how they regulate workers’ compensation. A lawyer familiar with your state’s workers’ compensation system can help explain how settlements are managed locally. Fill out the form on this page to connect with a lawyer in your area.

Do You Always Get a Settlement From Workers’ Comp?

Not all workers’ compensation claims are resolved by settlement. In some cases, you file a claim with the workers’ compensation insurance provider and receive payment once the claim is approved. These straightforward claims do not require a negotiated settlement and typically process more quickly.

When Do You Get a Settlement From Workers’ Comp?

Settlements become necessary when there is a dispute over your claim or when it is difficult to estimate the full cost of your recovery.

If the insurance company denies or disputes your claim, you may need to challenge the decision. Challenging a claim denial can be complicated and the process varies by state. Most states require claim disputes to be reviewed by a government review agency. For example, California allows you to appeal a denied claim to the state’s Workers’ Compensation Appeals Board.

You may receive a settlement offer while you are still healing from a major injury or illness. It is in the insurance company’s interest to settle early when ongoing healthcare needs are less clear. Accepting a first settlement offer will let you receive your payout more quickly, but it may not fully cover your total costs if you develop unexpected setbacks during treatment.

Will Workers’ Comp Offer a Settlement Without a Lawyer?

Workers’ comp insurance companies will offer a settlement to you directly if you do not have a lawyer. Proceeding without a lawyer will allow you to avoid paying legal fees, but you won’t have a knowledgeable guide to ensure the offer is fair and will cover your complete expenses. Fill out the form on this page to connect with a workers’ comp lawyer near you.

How To Respond to a Workers’ Comp Settlement Offer

So you’ve received a settlement offer. Now what? Let’s take a look at your options and what you need to know about settlement values.

Workers’ Comp Settlement Offer Response Options

With a settlement offer in hand, you have three possible responses:

1. Accept the offer. This will be followed by payout of the offered amount as stated in the settlement agreement and closure of your claim. You cannot later demand additional benefits after a settlement is reached.
2. Negotiate. You’ll need to persuasively state the reasons why you expect something different from the settlement.
3. Reject the offer. In some cases, you may want to reject the offer completely while you continue recovery. It is helpful to get a lawyer’s input on this to make sure you will be able to continue receiving benefits after a rejected offer.

Reviewing average workers comp settlement numbers can help you gauge whether you’ve received a fair offer for your injury, but this cannot replace a lawyer’s expertise. The right lawyer, who prioritizes your interests over their own, can negotiate a better settlement. Workers’ comp lawyers have seen numerous settlements and know how to estimate fair compensation values. Fill out the form on this page to get help today.

Understanding Maximum Medical Improvement (MMI)

The timing of your workers’ comp settlement offer may be influenced by whether you have reached MMI. Reaching MMI indicates that you are unlikely to improve with further treatment. Once you reach MMI it is usually easier to estimate your overall medical expenses.

The formal definition for MMI will depend on your state. For example, Ohio defines MMI as when your condition “has stabilized and further functional improvement is unlikely, despite continued medical treatment or physical rehabilitation.”

Insurance companies sometimes prefer to offer a settlement before you reach MMI. This is because you are less likely to have a full grasp on your recovery costs while still undergoing treatment. Settling early makes it more likely that they can close your claim with a low offer.

Other Factors That Impact Settlement Value

Beyond MMI, these are the factors that have the greatest impact on how much your workers’ comp claim will be worth:

• The severity of your injury
• Disability status as a result of the injury
• Current and future medical expenses
• Your ability to return to work
• Lost wages and earning potential as a result of the injury

Workers’ Comp Settlement Check Timeline

After you agree to a settlement, it still takes some time to receive your check. How long you can expect to wait depends on your case circumstances and the state you’re in, but here’s the general timeline:

• Settlement agreement reached. Once you and the insurance provider agree to a settlement, the agreement must be written up and signed by both parties. If you are working with a lawyer, they will review the written agreement to make sure it accurately reflects the settlement reached.
• Agreement approved. In most states, such as Missouri, a judge or government agency representative must approve settlements before they become final. This may involve a formal hearing or may be an administrative review process. Either way, you won’t receive payment until the agreement approval is complete.
• Payment processed. Once everything is approved, it is just up to the insurance company to cut a check. Some states require settlement checks to be paid within set deadlines, usually a few weeks to a month. For example, Minnesota requires settlements to be paid out within 14 days.

Most workers’ comp settlements are not taxable income, but it’s worth reviewing your total settlement with a lawyer to avoid surprises.