Does an insurance company need my consent to settle a claim on a Professional Liability policy?

settle a claimDoes an insurance company need my consent to settle a claim on a Professional Liability policy? Most Professional Liability policies for Design Professionals do have a clause in the policy that says that the carrier will need consent from the first named insured prior to settling a claim. Below are few examples of the clause in the policy that requires consent from your Design Professional firm:

Travelers Casualty & Surety Insurance Company:

  1. SETTLEMENT

The Company may settle or compromise any Claim as the Company deems expedient with the consent of the Named Insured, such consent not to be unreasonably withheld. 

Navigators Insurance Company:

  1. Settlement

The Company will have the right to make, with the consent of the Named Insured, any settlement of a claim under this policy.  However, the Named Insured’s consent shall not be unreasonably withheld. 

Great American Insurance Company:

  1. The Company have the right to make, with consent of the Named Insured, any settlement of a Claim under this Policy. However, the Named Insured’s consent shall not be unreasonably withheld.

CNA

  1. The Insurer will not settle any claim without the informed consent of the first Named Insured.

A few things to keep in mind when your firm is looking at a settlement on a Professional Liability claim.  Speak with your attorney and the claims representative on the claim so you have an understanding of what the settlement entails.  Sometimes ‘fighting’ a claim can be more costly than settling a claim before going to trail.  Also, does the settlement agreement keep your firm from being pulled into a future claim on the same project?

There may be some circumstances where these consent to settle clauses are excluded, be sure you are reading your policy so you have a clear understanding of the clause.

Please call or email your PUI agent with any questions with regards to your Professional Liability policy.

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