June 5, 2025 | Workers' compensation

If you’re navigating the complex world of workers’ compensation claims, you’ve probably encountered a flood of information, offers, and advice. The stakes are high when settling your case, and making the wrong move could cost you thousands—or even tens of thousands—of dollars. Having worked closely with injured workers, we’ve seen firsthand the common pitfalls that trip up claimants during the settlement process.

In this settlement guide, we’ll walk you through the top mistakes injured workers make when settling their workers’ compensation cases. Whether you’re considering an early offer, trying to understand different settlement types, or figuring out how to calculate your case’s true value, this article will equip you with the knowledge you need to protect your rights and maximize your settlement.

Accepting an Early Settlement Offer Without Proper Guidance

One of the biggest mistakes we’ve seen injured workers make is accepting an early settlement offer, often before they even consult with an attorney. Insurance companies are savvy—they understand the complexity and potential exposure of your case. Sometimes, they throw out a low-ball offer early on just to entice you to settle quickly and move on.

Before you jump at the first offer, pause and seek professional advice. Early offers rarely reflect the full extent of your losses and future needs. Taking time to evaluate the offer with a knowledgeable attorney can prevent you from leaving money on the table.

Believing the Insurance Company Is on Your Side

Another critical mistake is assuming the insurance company has your best interests at heart. Insurance adjusters and case managers often present themselves as friendly helpers, but their primary responsibility is to protect the insurance company’s—and employer’s—financial interests.

Don’t be fooled by the niceties. Always approach communications with the insurance company with caution and rely on your attorney to advocate for you.

Failing to Negotiate the Settlement

It surprises us how often injured workers accept whatever the insurance company offers without negotiating. Settlement discussions can take many forms—sometimes an insurance adjuster will ask if you’re interested in settling, other times they’ll request a demand first.

In my experience, it’s wise to ask for the insurance company’s initial offer before submitting your demand. This helps establish a baseline and can prevent you from asking for an unrealistic amount.

For instance, if an insurance company offers $15,000 to settle, that might sound like a lot upfront. But once you factor in attorney fees, future medical expenses, and what you actually need to live on, that amount might not be sufficient. Without legal guidance, you might accept that offer prematurely, putting yourself at a disadvantage.

Miscalculating the Value of Your Settlement

It’s essential to accurately calculate the value of your settlement.  Several factors affect this valuation:

• Future medical care costs, including surgeries, medication, and rehabilitation
• Vocational rehabilitation expenses
• Attorney’s fees and other legal costs
• Cost-of-living adjustments
• Social Security benefits and potential offsets

Failing to account for these elements can leave you underprepared for future expenses. For example, a client who accepted a lump sum without planning for ongoing medical costs might find themselves unable to afford necessary treatment later.

Conversely, overvaluing your claim can also backfire. we’ve had people ask for settlements that are far beyond the realistic value of their case, such as requesting $500,000 when their claim is worth closer to $50,000. This “nonstarter” approach can stall negotiations and waste valuable time.

Underestimating your claim is equally problematic. Not factoring in your average weekly wage, age, disability level, and lost time can result in a settlement that doesn’t fairly compensate you.

Confusing Schedule Loss of Use and Non-Schedule Cases

Understanding the distinction between schedule and non-schedule cases is critical in valuing your claim properly.

Schedule Loss of Use applies to specific body parts listed in a schedule chart, such as fingers, toes, or shoulders. For example, losing a pinky toe results in a schedule loss award, which entitles you to a fixed number of weeks of compensation based on the severity of the loss.

Non-Schedule Cases involve injuries that don’t fit into the schedule chart, such as back injuries or injuries affecting multiple body parts. These cases require more complex valuation based on your overall level of disability, lost wages, and age.

Many injured workers mistakenly assume that all injuries are treated equally under workers’ compensation, but the reality is that the schedule chart limits the compensation for certain injuries.

Expecting Workers’ Compensation to Make You Whole

One of the most common misunderstandings is thinking workers’ compensation will fully compensate you for your losses, including pain and suffering or loss of enjoyment of life. Unfortunately, these may not be covered.

That’s why many injured workers choose to return to light-duty work if possible. Doing so allows you to earn some income while still receiving workers’ compensation benefits, which can help mitigate your financial losses.

Failing to Account for Credits and Deductions in Settlement Calculations

This means that your settlement amount will reflect payments you’ve already received, so don’t expect a full lump sum that ignores prior benefits.

Mismanaging Settlement Funds After Closing the Case

Even after you settle, the challenges don’t end. A significant mistake many injured workers make is mismanaging their settlement funds.

It’s crucial to plan for the rest of your life when you receive your settlement.  Proper planning can help you invest your settlement to generate income and cover future expenses.

On the flip side, some people blow their settlement on short-term pleasures—vacations, luxury cars, or expensive gadgets—and then find themselves out of money when medical bills or living expenses arise later.

Not Hiring an Experienced Workers’ Compensation Attorney

By far, the biggest mistake injured workers make is trying to navigate their workers’ compensation settlement without professional legal help.

The insurance company has a team of experienced attorneys and adjusters working to minimize their payouts. You need someone on your side who understands the nuances of the workers’ compensation system, can accurately value your case, and negotiate effectively.

Having an attorney means you know the right time to settle, understand your settlement options, and avoid costly errors that could jeopardize your financial future.

Conclusion: Protect Yourself and Maximize Your Workers’ Compensation Settlement

Settling a workers’ compensation case is a complex process filled with potential traps and pitfalls. From accepting early lowball offers to misunderstanding settlement types and mismanaging your funds, the mistakes injured workers make can have long-lasting financial consequences.

To protect yourself, always:

• Consult with an experienced workers’ compensation attorney before accepting any offers
• Calculate your settlement value realistically, including future medical and legal costs
• Maintain reasonable expectations about compensation limits, including the non-compensability of pain and suffering
• Plan carefully for your financial future after settlement

If you have questions or want to discuss your case, don’t hesitate to reach out for a free consultation. Protect your rights, understand your options, and make informed decisions to secure the best possible outcome.  Call us at 402-933-3345.

Top Workers Comp Settlement Mistakes