Question

Dr. Adams is in the middle of a malpractice lawsuit. Her insurer decides it will be more cost-effective to simply settle the suit rather than draw the process out over several months. Assuming Dr. Adams holds a Professional Liability Policy, which of the following statements is TRUE in regards to settling the claim?

A. Dr. Adams is responsible for all costs
B. The insurer makes the final decision
C. Dr. Adams must reject any settlement
D. The insurer covers the settlement costs

Answer 1

If Dr. Adams holds a Professional Liability Policy, the insurer will cover the settlement costs and has the authority to make the final decision to settle the claim.

Step-by-step explanation:

In regards to settling the claim in a malpractice lawsuit, if Dr. Adams holds a Professional Liability Policy, the insurer typically covers the settlement costs.

This means that option D, 'The insurer covers the settlement costs,' is the correct statement. When the insurer determines that settling the suit is more cost-effective than going through a lengthy legal process, they have the authority to make the final decision to settle the claim.