Understanding Consent Provision
Do you have a voice in your defense? Settlement of a claim involves more than money – it can have a long-term negative effect on your reputation, your practice, your license, your mobility and your future insurability. It is very important that you understand your rights if you disagree with your insurance company's desire to settle a claim. Following are some examples of 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; however, they main contain exceptions, 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 exceptions to a policy's consent clause, it may not be a pure consent policy.
Hammer Clause Some policies contain 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 have originally cost them to settle.
Binding Arbitration Like the hammer clause, a binding arbitration clause 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.