As the AVP of Client Service for NCMIC, I can tell you that one of the areas of malpractice insurance that may seem straightforward but that is often misunderstood is the “Consent to Settle” feature. Toss in the “Hammer Clause” and you have a recipe for confusion.
by A.J. Simpson in Malpractice Insurance on Thursday, April 2, 2015
Just this week one of our client representatives received a call from a disgruntled doctor who was asking about these very features because his former insurer hadn’t explained them when he purchased his old policy – and it cost him in the end. So, I thought I’d take a minute to provide a refresher on the all-important true consent to settle provision of all NCMIC malpractice insurance policies.
Getting your day in court
At NCMIC, we recognize that a doctor’s reputation and good will, although hard to value, are of utmost importance and doctors need the ability to protect their image against harm based on unfounded or trumped-up malpractice charges. That’s why we make sure we always receive a doctor’s authorization before settling any claims. This is known as the “Consent to Settle” provision.
Without the consent to settle language, some other insurance carriers might settle your claim regardless of your opinion or really any regard for your reputation. Their only concern is to get out of the claim as quickly and as inexpensively as possible. We’ll never do that. When a doctor does not consent to settle, NCMIC pays defense costs to defend the doctor to a jury verdict.
Consent to settle gives you a voice, allowing you to make a business decision regarding the merits of the case, the affects of a settlement and the possible result should the offered settlement be refused. Bottom line: It gives you control over your claim, and if you want your day in court, we make sure you get it.
Stop! It’s hammer time.
Although not a part of all malpractice policies, the “Hammer Clause” is another often- misunderstood aspect of consent to settle. Please note: The NCMIC policy does not include hammer clauses. Here’s what you should know about a hammer clause in a nutshell:
It’s a small part of consent to settle language that could potentially penalize an insured if they don’t consent to a proposed settlement. It says that if the insurance company has the opportunity to settle a claim but the doctor does not consent, the maximum amount the insurance company will pay for the claim in final judgment is the amount for which it could have been settled.
The lesson learned: Not all consent to settle features are created equal. Always read the fine print and be sure you understand what you are buying with any policy so you don’t get “hammered” in the end.