Non-pecuniary just means, not related to the loss of pay/income. That by itself does not help you decide whether the payment is for a physical injury or for some other non-physical and non-monetary loss (like embarrassment, emotional distress, or something like that.)
And, if this was related to lost wages and physical injury only, then it may not be an unlawful discrimination case. That would also be dependent on the facts.
(For example, my ex-wife became disabled due to a back injury and can't work. The employer's disability insurance company denied her claim saying she could still work because her job was mostly sitting, she replied she could not work because the pain meds affected her ability to think clearly and perform the work. She sued the disability insurer and won. Because disability is a "protected class", it was considered an unlawful discrimination case and she could deduct her legal fees from her back wages.)
Only you know all the facts and circumstances. It's up to you to sign the tax return that it is truthful, and it is up to you to prove your case if you are audited.
