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  • Writer's pictureRobert Schuerger

What Is a "Release" in a Settlement? | Everything You Should Know

Reaching a fair settlement offer is one of the most comforting things for those filing a personal injury claim. However, these people need to sign a release document before getting their settlement payment.

The insurance company will send the document to outline payment plans and other important information. If everyone signs, the claim is officially closed.

It's important to remember that most insurance companies try to pay as little money as possible in settlements. Those who sign a release without consulting with a legal expert won't be able to seek more money to cover medical expenses and other damages.

The following page explains why getting legal counsel before signing a settlement and release agreement is important, as well as any other details that people should keep in mind.

About Settlement Release Agreements

About Settlement Release Agreements

A settlement and release agreement is a legally binding document. It's used to settle a dispute between the parties involved in a claim. These agreements are common in personal injury claims. Schuerger Shunnarah Trial Attorneys can explain what qualifies as a personal injury lawsuit.

Most documents include the terms that define how the settlement will be paid, the amount of money, and other important details, such as a provision explaining confidentiality obligations. Once the other party signs the document sent by the insurance company, they agree to release it from any other liability related to the dispute.

A release agreement's terms will depend on the insurance company and what happened. Some documents, for example, state that both parties have to bear their own attorney fees and other legal costs.

Key Elements a Settlement and Release Agreement Should Include

Most settlement agreements will have a similar outline. Here's an overview of all the provisions and/or elements a person can expect:

Summary of the Dispute

As the name implies, the document has to include a summary of the legal dispute between the two (or more) parties. It should be as detailed as possible.

Information About the Parties Involved

A settlement agreement must also have the names and addresses of the people involved in the case, particularly the defendants and plaintiffs.

Specifics of the Claim

This part of the agreement must outline the severity of property damage, pain and suffering, and any other relevant factors for the case.

Confidentiality Agreement

If both parties sign a confidentiality agreement, they agree to keep the provisions in the document confidential. In other words, they can't discuss the settlement with other people.


Signing a non-disparagement clause means that no parties can make a negative statement about each other with the intention to harm.

Payment Amount

The insurance company sets the amount of money that will be paid to the "releasing party." Depending on the case, the company could make a lump sum payment or pay in installments. Both parties are free to negotiate on the matter.

Release of Claims

Once the releasing party signs the document, they agree to not pursue further legal action against the insurance company/settling party. A release of claims means the person is "releasing" the other party from any liability related to the case.

Governing Law

Both parties must decide on the law supervising the agreement.

How to Evaluate a Settlement Agreement Correctly

There are plenty of factors people need to evaluate before signing a settlement release agreement. It's important to remember that both parties have the right to negotiate until they reach an appropriate decision for both.

Some of the elements that need to be reviewed before signing include:

  • Scope of the dispute

  • Severity of the damages

  • Risks and associated costs with continuing the dispute

It's also important to evaluate if the insurance company (or other party) can pay the settlement.

Sometimes, it's better to settle for a lesser amount if one party can't meet the original payment plan. The goal of the negotiation process is to reach a plan that's manageable for everyone.

Who's Responsible for Reviewing and Signing Settlement Agreements?

Most of the time, the insurance company will get a personal injury attorney in Dallas TX to prepare the settlement agreement. This agreement will be sent to the victim.

Even though the victim can review the terms without help, it's recommended to get help from a lawyer. These experts can help the person decide whether the terms are acceptable or not. They also help in the negotiation process.

Once both parties are ready to sign, they must do it in front of a notary public.

What If the Victim Doesn't Want to Sign a Settlement Release Agreement?

Usually, an insurance company won't pay out the settlement until the victim signs the release document.

In case there are unknown claims the victim may want to pursue in the future, they may want to get help from a lawyer so that they can negotiate with the company. If they're successful, they may be able to exclude those unknown claims from the agreement.

What Happens When Everyone Signs the Settlement Agreement?

Once everyone signs the document, the insurance company is legally obligated to start the payment plan outlined in the document. Most of the time, the victim (or their attorney) will start receiving their settlement checks within the first two months of signing unless the case involves an incapacitated adult or a child. In those cases, the settlement would have to go through a state/probate court.

If the company fails to make the payment within a reasonable timeframe, the victim will have the right to file a lawsuit for breaching the terms of the document.

Bottom Line - Why Getting Help from an Experienced Personal Injury Lawyer Is Important

Bottom Line - Why Getting Help from an Experienced Personal Injury Lawyer Is Important

There are many factors to evaluate when navigating personal injury cases. The victim, for example, will have to determine if they want a broad or narrow release of the claims. They will also need to decide if they want to release unknown claims, which is a risk, as they won't be able to seek compensation for these damages in the future.

Hiring a lawyer is the best option available to those seeking maximum compensation from a car accident or any other incident that caused bodily injury. These professionals can review the settlement and release agreement sent by the insurance company and determine whether it's fair or not. They can also help with questions like what is personal injury fraud?

The lawyers at Schuerger Shunnarah offer a free consultation to anyone interested in reviewing their release agreements. It's already hard enough to navigate a personal injury case, so letting a legal expert help will give the victim the peace of mind they deserve during these hard times.


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