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Nonparticipation Settlement Clause

Nonparticipation Settlement Clause

Definition

Nonparticipation Settlement Clause — provisions in professional liability policies that give the insurer the right to settle claims against insureds—for any amount the insurer deems appropriate—without first consulting the insured. Such provisions are unfavorable, and only a minority of insurers use this approach. In contrast, most professional liability insurers' forms reserve for the insured the right to approve settlement amounts to claimants.

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