What is a 'Hammer Clause'?

What is a 'Hammer Clause'?

For executives and board members, and also for most professionals, your actions have big effects on others. Consequently, they need special insurance, such as a Professional Liability policy or a Directors & Officers policy. In these policies, there is almost always a 'Consent to Settle' clause, often referred to as a 'Hammer Clause', that puts restrictions and conditions on settling claims. 

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Introduction to the Directors & Officers Policy

Introduction to the Directors & Officers Policy

The Directors & Officers (D&O) policy has many similarities with other forms of liability insurance. However, the D&O policy is specifically used to protect the upper management (CEOs, CFOs, etc.) and board members from lawsuits claiming that they've made poor decisions that have negatively affected the company/organization.

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