An insurer made a big mistake, and our client’s settlement increased by $10,000

We recently received a settlement check that was delivered one day late by FedEx. The insurer did not even know the check was late.

Georgia law imposes a 20% penalty on workers’ compensation settlement checks that are not paid on time. The clock starts ticking on the day your settlement is approved by the State Board of Workers’ Compensation. When these checks arrive late, the penalty is added to ensure that the injured worker receives an appropriate remedy for the inconvenience and stress caused by delayed funds.

The concept known as the “mailbox rule” often governs how the payment date is determined for checks sent via standard United States mail. Under the mailbox rule, a payment is considered “made” on the date the check is properly addressed, stamped, and placed in the mail. For example, if your settlement check is postmarked before the deadline, the insurer can generally argue it was sent on time. However, if the postmark date is beyond the statutory time limit, you may be entitled to collect the 20% late penalty. This protection acknowledges that transit delays or slow mailing services should not be charged to the injured worker’s account once the insurer has taken all necessary steps to send the payment.

An additional consideration arises when checks are sent from out of state.

Georgia law recognizes that interstate mail generally takes longer, which can complicate the issue of timely delivery. To account for these delays, the insurer must mail the check at least three days earlier than usual 20 day deadline if it is being sent from out of state. Failing to do so may result in the check arriving after the statutory deadline, making the insurer responsible for the 20% late penalty if the payment is ultimately deemed untimely. Maintaining documentation of postmarks or courier tracking details is crucial to proving whether the insurer met this three-day early mailing requirement for out-of-state payments.

It is essential to note that courier delivery services such as FedEx or UPS are treated differently.

When an insurer sends a check via courier, the payment date is not subject to the mailbox rule.

Instead, it is considered an in-person method of delivery. This means the payment is considered “made” only when the recipient actually receives the check, rather than when the sender places it with the courier. If the package arrives after the mandated deadline, the injured worker could hold the insurer liable for the 20% penalty, even if the insurer handed the check over to the courier before that deadline.

Because the insurer did not understand the “mailbox rule”, we won our client another $10,000.