Consent to Settle
It is very important that you understand the rights, if any, extended to you in your policy, including the possible limitations of your rights if a settlement is an option that you do not agree to. Following are some examples of differences between consent provisions:
Pure Consent Clause
A pure consent clause has no strings attached. In order to settle a case the insurance company must obtain your approval.
Exceptions to Pure Consent Provisions
Some companies market that they have consent-to-settle in their policy—but several of these policies often have exceptions, some of which may limit your rights to settle or to defend the case and may potentially leave you with significant out-of-pocket expenses. If there are any clarification statements or exceptions to a policy’s consent clause, it may not be a pure consent policy.
Hammer Clause
Some policies have what is called a “hammer clause.” There are variations of the clause but generally this type of clause states that if you tell your insurance company that you will not consent to a settlement, you will personally be responsible for any verdict or future settlement that exceeds the amount it would originally have cost them to settle.
Binding Arbitration
Like the hammer clause, a binding arbitration consent-to settlement does not allow you to determine whether or not you get your day in court. Arbitration is a resolution process in which a disagreement between two or more parties is resolved by an impartial third party. It is important to note that frequently an arbitrator’s decision is based upon finding a middle ground that may try to appease both sides.
Board of Your Peers
This is almost identical to binding arbitration, except instead of an arbitrator, a panel of your peers will decide the fate of the case. The panel may be comprised of dentists selected by your dental association or the insurance company. Your privacy is an additional potential risk if your policy requires this type of consent since the details of your case may be provided to a panel of your peers.
