Medical Malpractice: The dreaded Hammer Clause

Malpractice: Hammer ClauseHaving a hammer clause in your malpractice policy can be problematic in the event of a claim.

A Hammer Clause in your policy may read like this:

“Insurer will not settle or compromise any claim without the consent of the insured. If, however, the insured refuses to consent to a settlement or compromise recommended by insurer and elects to contest such claim or continue legal proceedings in connection with such claim, then insurer’s liability for the claim shall not exceed the amount for which the claim could have been so settled, plus claims expenses incurred up to the date of such refusal.”

Avoid policies with these hammer clauses at all cost.

A ‘consent to settle’ policy that requires the insurance company to have your approval in order to settle a case is most desirable.

The SMA Service’s exclusive Medical Malpractice program does not have a hammer clause and the consent to settle lies with the physician. We’ve aggregated the over 4,000 Southern Medical Association members to provide you with the underwriting discounts and concessions to independent physicians that would normally be reserved for large hospital systems.

Our program could potentially save your practice up to 50% off your current rates.

Do you have time to read your policy? Most of our clients don’t – We can provide a quick review to determine if you have the dreaded hammer clause at no obligation.

Contact us at for additional information.

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About Teddy Gillen

Teddy Gillen is the Regional Director of Southern Protective Group and has a degree in Risk Management & Insurance from the University of Georgia. Southern Protective Group is a specialized, market-savvy insurance brokerage practice based in Metro Atlanta. Licensed nationwide with clients coast-to-coast, SPG is one of the Southeast’s fastest-growing, premier insurance brokerage firms. SPG is the Southern Medical Association’s exclusive endorsed broker for medical malpractice insurance coverage.

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