Consent to Settle
Key Takeaway
A clause giving the insured attorney the right to approve or reject any settlement proposed by the insurer. Without this clause, the carrier could settle a claim over the attorney's objection, potentially damaging professional reputation.
Definition
A clause giving the insured attorney the right to approve or reject any settlement proposed by the insurer. Without this clause, the carrier could settle a claim over the attorney's objection, potentially damaging professional reputation. Most legal malpractice policies include some form of consent provision, though the terms vary between carriers.
Why This Matters for Law Firms
Understanding this concept is essential for law firms because it directly affects how your coverage responds when a claim is filed. Misunderstanding policy structure terms can leave your firm exposed to uninsured losses, particularly during carrier transitions or when claims surface years after the underlying work was performed.
Example Usage in Context
A managing partner reviewing the firm's renewal materials might ask the broker: "Can you confirm our consent to settle aligns with what we had under the prior carrier? We want to make sure there are no gaps in our retrospective protection."
Related Q&A
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