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Settlement Clause

What is a Settlement Clause?

Settlement Clause is a term that may refer to a clause in a Directors and Officers (D&O) insurance policy that outlines when and under what conditions the insurer is allowed to settle a claim made against the company or its directors and officers. This clause typically specifies that the insurer has the right to settle a claim without the consent of the insured, meaning that a claim may be settled without the insured's knowledge or approval.

Settlement Clause in More Detail

The settlement clause also outlines the insurer’s responsibilities in the event of a settlement, such as payment of the claims, as well as the insurer’s responsibility to defend the insured against any claims. This clause is important, as it ensures that the insurer has the right to settle a claim without the insured’s consent, and it also outlines the insurer’s responsibility to defend the insured in the event of a claim.

The settlement clause is an important part of a D&O policy, as it ensures that the insurer is able to protect the insured from any potential claims and liabilities. It also outlines the insurer’s responsibilities in the event of a settlement, ensuring that the insured is adequately protected. In addition, the settlement clause ensures that the insurer is able to settle a claim without the consent of the insured, ensuring that the insured is not exposed to any potential legal risks.

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