Visitor Question

Resolving a Workers Comp Case and Third Party Case for a “Blanket” Settlement?

Submitted By: Mary (KC, MO)

I have used this Q & A form before and know you edit to make it look more professional (which I love) so I will just put all the info in and let you keep out what is not necessary.

We also have 200% confidence in our attorneys so there will be no interference in the relationship. Another opinion is just welcome information.

My husband was left severely disabled from a workplace accident 2 1/2 yrs ago. He was approved for SSDI (Social Security Disability Insurance) from the accident date. He currently has an open workers compensation and personal injury case, and is currently in the settlement process with the workers comp claim.

Depositions are being taken by his attorneys and the insurance company’s attorneys, which should be completed this month. At my husband’s deposition the insurance company’s attorney brought up the subject of a blanket settlement for both cases. The same insurance covers both cases and the same law firm is handling both cases for the insurance company.

We all feel it was premature to even bring up the subject at this point, but I am curious as to the pros and cons of this type of blanket settlement.

At this time, our attorney is preparing for trial on both cases. He is seeking PTD (Permanent Total Disability) in the worker’s comp case. The personal injury case will go to trial as well if a settlement isn’t agreed on – this is a 3rd party claim but it is with the same insurance company.

Does this give us more options as far as “double dipping”? If we settle, can we settle with the option that we do not pay back monies to worker’s comp from the civil case? What would be the advantage to a “blanket settlement”? Would taxes have to be paid differently?

Thanks for any information you can give about these issues.

Disclaimer: Our response is not formal legal advice and does not create an attorney-client relationship. It is generic legal information based on the very limited information provided. Do not rely upon the information in our response, or anywhere else on this site, when deciding the proper course of a legal matter. Always get a personalized case review from a local attorney.


Dear Mary,

Your husband is represented by attorneys. You should seek legal advice from them. We can though make some general comments on the fact pattern you present…

We can only assume the third party claim arose as a result of a defective product or defective machine at your husband’s workplace. Or the third party claim may have arisen out of an auto accident caused by a third party. There are other possibilities.

A blanket settlement will be an agreement worked out between your husband’s attorneys and those from the insurance company. They can agree to waive partial or total reimbursement for workers compensation benefits. They can also agree to just about any other arrangement they come to as long as it isn’t in violation of any laws.

Federal income taxes will not have to be paid on any monies your husband receives in his settlement for his medical bills, out of pocket expenses, and pain and suffering. He will though have to pay taxes on any monies he is paid for his lost wages.

Learn more here: Work Accident vs Third Party Claims

The above is general information. Laws change frequently, and across jurisdictions. You should get a personalized case evaluation from a licensed attorney.

Find a local attorney to give you a free case review here, or call 888-972-0892.

We wish you the best with your claim,


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