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Consent To Settlement Clause


A provision (also known as the "hammer clause" and "blackmail settlement clause") found in professional liability insurance policies that requires an insurer to seek an insured's approval prior to settling a claim for a specific amount. However, if the insured does not approve the recommended figure, the consent to settlement clause states that the insurer will not be liable for any additional monies required to settle the claim or for the defense costs that accrue from the point after the insurer makes the settlement recommendation.

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