While there are many benefits to settling your workers’ compensation case, you will also likely be giving up significant rights. Because settlements are typically final, it’s wise to consult with a South Dakota workers’ comp lawyer before you sign any agreements. (To learn how much that might cost you, see our article on attorneys’ fees in South Dakota workers’ comp cases.)
A settlement is a voluntary agreement between you and the insurance company to resolve your workers’ compensation case. In exchange for an agreed-upon sum of money, you give up some or all of your rights in your workers’ compensation case.
Lump sum settlements are permitted in South Dakota for disputed claims. A lump sum settlement is where the insurance company makes a one-time payment to close out your workers’ comp case for good. This often requires you to give up your right to all future benefits, including medical coverage. The lump sum is all the compensation you will ever receive for your injury, even if your condition unexpectedly worsens in the future.
In some cases, the insurance company might agree to a more limited settlement. For example, the insurance company might agree to close out your disability benefits but continue to cover future medical care. You and the insurance company can also agree to a structured settlement—where your settlement funds will be paid in installments over time—instead of a lump sum.
You can also request a lump sum payment of your benefits without closing out your workers’ comp case. If you are entitled to permanent disability benefits from the insurance company, you can file a petition with the South Dakota Department of Labor and Regulation for a lump sum payout of your benefits. The department will review your request and approve a partial or total lump sum payment if it appears to be in your best interests. However, your benefits will be discounted by a certain percentage to bring them to their present value. This calculation can be complicated, so you should consult with a lawyer before request a lump sum payout of your benefits.
It’s important to understand the full the extent of your injuries before you settle your claim. For that reason, you should typically wait until you have reached maximum medical improvement. This is when your doctor finds that your condition has stabilized and assesses whether you have a permanent disability. Before that point, the extent of your injuries—and therefore how much you are entitled to in benefits—will be unclear.
The South Dakota Department of Labor and Regulation must approve all workers’ comp settlements. You and the insurance company will file settlement paperwork with the department. If the department doesn’t send you a disapproval notice within 20 days, your settlement is considered approved. Once the settlement is approved by the Division, it is final.
The amount of the settlement varies widely based on the severity of your injury, your ability to work, and your pre-injury wages. Conflicting evidence in your case—for example, as to whether your injury is work-related or whether you are permanently disabled—will also impact your claim’s settlement value.
To get a general idea of how much you might be entitled to, see our article on South Dakota workers’ comp benefits. However, a claim’s settlement value depends on many factors, which can only be evaluated by a workers’ comp lawyer familiar with your case.