Many professional liability
policies contain “consent to settle” clauses, which
usually provide that your insurance carrier can't settle
a liability claim against you without your consent.
But that doesn't mean they won't suggest strongly that
you follow their lead in determining the best possible
outcome for the claim. And sometimes your insurer will
believe the best outcome is to offer to settle the
claim before going to court. Even if you're convinced
that you're not negligent in any way for the damages
claimed, your carrier might still believe that you'd
lose your case, due to past experience with similar
But suppose you don't want to consent to such a settlement?
You might fear damage to your reputation. You might
simply feel that it's wrong to give in when you firmly
believe you've done nothing wrong. Why shouldn't you
tell your insurer that you refuse to settle the case,
and demand that they defend you in court?
Before deciding whether to give or withhold your
consent, talk with us about what provisions in your
policy might apply. For example, suppose you withhold
your consent to settle a claim for a small amount and
the court later awards a significantly larger amount
to the claimant? Since the carrier could've settled
the claim for far less if you'd consented, do you have
any responsibility for any portion of the additional
And don't forget that the same provisions might apply
in reverse. You strongly want to settle the claim,
but the carrier feels that such an offer would be premature
and prefers to go to court. What are your options?
Armed with the knowledge from our discussions with
you about your specific coverage provisions, you and
your attorney can make the best choices with a clear
understanding of your options and their implications.