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Factors That Affect the Value of Your Workers’ Compensation Settlement


— August 9, 2023

Note that in case your Primary Treating Physician’s recommendation was shot down by the insurance company or the employer, it’s important to get the help of a Qualified Medical Evaluator (QME).


Each workers’ compensation case is different and as the circumstances differ, so do the benefits that you can receive. There’s no single formula to calculate the compensation amount and it’s important to consult with a specialist to assess all factors properly.

You deserve fair compensation for your injuries and losses—And this guide will explain a  few of the most important factors that play a role.

It’s important to note that these are just general guidelines. Actual compensation differs from case to case. Get in touch with a reputable law office such as Kenton Koszdin to fully understand the compensation you might be eligible for in your particular case.

Nature and Extent of the Injury

The nature and extent of the injury is the most important factor that affects the value of a workers’ compensation settlement. It takes into account the severity of the injury and the resulting impact on the physical and mental well-being of the worker or employee.

Injuries that lead to long-term disabilities or impairments lead to higher settlement amounts. For example, catastrophic injuries such as spinal cord injuries and traumatic brain injuries require extensive medical treatment and rehabilitation, not to mention ongoing care. These can easily result in higher compensation to cover all the costs of medical expenses as they also affect the individual’s quality of life.

The extent of the injury and its impact on the worker’s ability to do their job or earn a living, in general, is also taken into consideration. If the injury prevents the individual from returning to their previous job or engaging in their usual employment, the compensation will be higher to account for the loss of future earning capacity.

A lot of things are considered to assess the exact nature and extent of the injury such as medical records, diagnostic tests, expert opinions, and other types of evidence.

Medical Expenses and Treatment Costs

Everything from the extent and duration of necessary medical treatment to any related expenses plays a significant role in determining the total settlement value. Generally, workers’ comp covers medical expenses directly related to the injury including doctor visits, hospital stays, surgeries, medications, rehabilitation services, physical therapy, etc.

That’s precisely why it’s so important to keep a detailed record of all bills and receipts.

Apart from near-future or ongoing costs, the anticipated future costs associated with treatment, medication, rehabilitation, etc. are also considered, especially if the injury requires long-term care or specialized treatments.

This can cover future surgeries, therapy sessions, assistive devices, and of course, the medication and hospital costs as per the most accurate forecasts.

Lost Wages and Income Loss

The extent of lost wages is also a key factor in determining the final settlement value. Injuries that prevent employees from working make the employee eligible for the income they have already lost or will lose due to their inability.

The duration and severity will be taken into account and projected against the individual’s ability and potential to earn wages down the line. If someone becomes temporarily or permanently disabled from returning to their previous job or earning potential, the settlement amount will include the income loss of that period.

Documents related to pre-injury earnings are important at this point including pay stubs, tax records, employment contracts, etc. 

Permanent Disability and Impairment

Young People, Mostly Girls, Report Chronic Pain, Suicidal Thoughts
Photo by Inzmam Khan from Peels

A lasting physical or mental impairment or condition resulting from a workplace injury or cause that affects the individual’s ability to perform their job or engage in other activities is called permanent disability.

The presence and degree of any permanent disability or impairment is one of the biggest factors in determining the settlement value. Medical examinations by qualified healthcare professionals are used to assess the severity of the permanent disability.

Though different jurisdictions may use different rating systems to assign a specific impairment rating to quantify the level of disability, here are some general pointers they take into account:

  • Nature and extent of the injury
  • Functional limitations
  • The impact on daily activities
  • Potential long-term effects on the individual’s quality of life
  • The body part(s) affected
  • The ability of the individual’s ability to earn a living
  • The individual’s age, occupation, and pre-injury earning capacity

Accurate and comprehensive medical documentation and assessments can support your claim for permanent disability and impairment. Apart from things like medical records and diagnostic test results, a lot of weight is put on expert medical opinions and evaluations from specialists that are familiar with the condition or disability. 

Usually, permanent disabilities are eligible for higher compensation. Something temporary and treatable like workers comp settlement back injury, for example, will be lower than the workers’ comp settlement for brain damage.

Wrapping Up

Those were a few of the most important and common factors that influence the amount of workers’ comp you’re eligible for. It’s very important to consult with an experienced workers’ compensation attorney to navigate the usual complexities. The assessment of permanent disability and impairment is critical to ensure that your rights are protected and that you get the maximum compensation for your injury.

An attorney will also advocate for fair compensation on your behalf.

Note that in case your Primary Treating Physician’s recommendation was shot down by the insurance company or the employer, it’s important to get the help of a Qualified Medical Evaluator (QME). QME workers comp analysis can help you get the compensation you deserve in case of such disputes.

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