Facilitates resolution of incidents before they evolve into lawsuits. Clearly, all professional liability claims place an insured's reputation heavily at stake. As such, it is generally believed that the professional should have the right to approve the selection of council, as discussed previously, and approve final settlements with claimants. This is why it is imperative that your policy wording contains a consent to settlement clause, which gives you the final sign off on all settlements. Be careful to examine the ramifications of these clauses, however, because some of them may make you personally responsible if you refuse to settle and continue the case, which ultimately results in a higher verdict.
Many times there is a fine line between accepting and declining a claim.
Therefore, it is imperative that you place your coverage with an insurer that knows your business, as well as employs competent claims personnel and defense counsel which can provide quick and accurate turnaround. The information provided in applications is used by underwriters of an insurance company to decide whether to insure a given professional. It also affects the scope of coverage made available and the price offered. The insurer relies on the warranties made in the application as a basis for underwriting the policy. All warranties made by an insured in the application become part of the policy.