Claims
Settlement Authority
The authorization granted to a party, typically the insurer or defense counsel, to negotiate and agree to a settlement of a claim up to a specified dollar amount. In legal malpractice policies, settlement authority provisions interact with the consent-to-settle clause to define who has the power to resolve a claim and under what conditions. Some policies grant the insurer full settlement authority, while others require the insured's consent before any settlement can be reached.
Related terms
Consent to SettleA policy provision requiring the insurance company to obtain the insured's approval before settling ...Hammer ClauseA policy provision that limits the insurer's financial exposure when the insured refuses to accept a...Mediation ClauseA policy provision requiring that disputes between the insurer and the insured, or between the insur...