Compromise and Release

A Compromise and Release Agreement is the formal process to finalize a lump sum settlement offered to the injured worker by the workers' compensation insurance company. A Compromise and Release "releases" the insurance company from the obligation to pay any future medical bills or from any other future liability from an injured workers work comp claim.

A Compromise and Release may be favored by insurance companies because it releases them from any future liabilities or responsibilities, but may be less desirable for the worker who may not fully understand the estimated cost of future medical care.

Considerations before accepting a Compromise and Release

Before accepting a Compromise and Release it is important that you fully understand the costs of your injuries, specifically, whether you will need any expensive surgery in the future.

In many states a Compromise and Release will have to be approved either by the Worker's Compensation Appeals Board in the state or a state judge. This approval may offer additional protection for you but may not be enough to fully protect your interests.

For instance, if you have very serious or permanent injuries you also may want to talk to a workers' compensation lawyer before accepting a Compromise and Release. In some cases the lawyer will insist that the agreement include a Stipulation, which allows you to receive medical care and reopen your case within 5 years from the date of the agreement if your condition changes.