Dental malpractice insurance policies can be confusing and intricate, and somewhere in the middle of all of the policy language you will often find a consent-to-settle provision -- one of the most important parts of the policy for a dentist to understand.
In essence, the consent-to-settle provision establishes a malpractice insurer's rights, duties, and obligations to an insured with regard to the settlement of a claim.
Why is this provision so important? Depending on how a malpractice insurer defines consent in a policy, dentists may find themselves in a position in which a claim has been settled on their behalf and they have not agreed to this settlement. When this is happens, the dentist has lost the final say in settling a claim.
While marketing material or "company philosophy" may generally state that a company gives an insured consent, you should investigate the actual policy language. Upon inspection of the actual language, you may find exceptions that remove the requirement that the malpractice insurer obtain the dentist's consent and instead gives all authority regarding settlement back to the carrier.
With this in mind, here are nine of the most common exceptions found in dental malpractice policies and a brief description of how they operate:
The hammer clause: If you refuse to consent to a settlement and elect to contest or continue to contest a claim, the company's liability for loss shall not exceed the amount for which they could have settled such claim had you consented, plus claim expenses incurred prior to the time the company made such recommendation.
"Unreasonable": You have consent authority unless the insurance company deems you unreasonable in withholding your consent.
Board approval: You have consent authority as long as the company's review panel or board agrees with you that your performance met the standard of care. If they disagree, the board assumes consent authority on your behalf.
Binding arbitration: You have consent authority unless the company disagrees, at which time they submit your refusal to consent to binding arbitration.
No longer insured by the company: You have consent authority unless you are no longer insured by the company at the time settlement or trial occurs. Other policies similarly state: You have consent authority ... unless you no longer have an active policy with the company at the time of settlement.
- Moved out of state: You have consent authority unless you have moved out of state prior to the time of settlement or trial.
Unavailable or cannot be located: You have consent authority unless you are not able to be located or you are otherwise unavailable at the time of settlement or jury trial.
License suspended: You have consent authority unless your professional license has been suspended, revoked, or surrendered at any time during the claim process.
Deceased or incompetent: You have consent authority unless you are deceased or deemed incompetent.
These are nine of the most common exceptions to the requirement that a malpractice insurer obtains an insured's consent prior to settlement. Take a good look at your policy to see how your carrier defines consent. If there are any conditions or exceptions, then your policy does not have "pure consent."
Medical Protective, a provider of healthcare malpractice insurance for physicians, dentists, and other healthcare providers and hospitals, has put together an educational website to help educate dentists on how consent provisions work and make the best decision for protecting their assets and reputations.
