Sued, Who Really Makes the Decision to Settle Your Claim?
professional liability policies customarily give an insured protection against
unauthorized settlement of a claim by an insurer. Such policies require that an
insured's consent to settle must be obtained before an insurer can pay a claim.
The reason for this requirement is that a claim made against a lawyer could have
adverse consequences to the lawyer's professional reputation. Requiring consent
to settle gives a lawyer protection from a precipitous settlement by an insurer
who may desire to wipe its books clean of a claim and reduce defense costs. AIM
is concerned about your reputation as a lawyer. AIM's policy provides in
The Company shall not settle any claim without the consent of its Insured.
no qualifications. If an insured does not elect to settle a claim, AIM
continues to defend and will proceed to trial. This important protection
provides an insured with peace of mind. Unfounded claims worthy of defense
deserve to be defended and tried. Settlement against an insured's wishes
could reflect poorly on an insured's reputation. AIM understands the need to
provide not only defense, but defense in a way that puts it and its insureds
on the same side working toward a common goal.
large, for profit, insurers employ a hammer clause in their policies for
use against their own insureds. The term comes from the concept that an
insured can be hammered into consenting to settlement against the
insured's wishes. These insurers qualify the consent to settle protection
by making an insured liable for any overage (difference between amount a
claim could have been settled for and ultimate verdict at trial) if an
insured declines to accept a settlement recommended by the insurer. Such
protection then becomes nothing more than an illusion. AIM's policy
protects you in this important, core function of a malpractice insurance
policy. Not sure if your policy has a hammer clause? If you're not insured
by AIM, it most likely does. Call AIM, we'll be glad to review your present
policy with you.
AIM Protects Lawyers Best!