When You're Sued, Who Really Makes the Decision to Settle Your Claim?

Most lawyers 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 pertinent part:

The Company shall not settle any claim without the consent of its Insured.


There are 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.

Typically, 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!





Attorneys Insurance Mutual of the South, Inc., 
Risk Retention Group

200 Inverness Parkway
Birmingham, Alabama 35242
Telephone 205-980-0009
Toll Free 800-526-1246
Fax 205-980-9009

Attorneys Insurance Mutual of the South, Inc., Risk Retention Group