In Dr. Adams' malpractice situation, which statement about her insurer's settlement decision is TRUE?

In the context of an insurance malpractice claim, the relationship between an insured (like Dr. Adams) and their insurance company typically includes a stipulation regarding settlement decisions. The principle of obtaining the insured's consent before a settlement is crucial because it protects the insured’s interests and allows them to have a say in the resolution of the claim.

Insurers generally have a duty to act in the best interest of their policyholders, and seeking consent before agreeing to a settlement ensures that the insured can evaluate the implications of the settlement offer, especially in terms of professional reputation, future liability, and potential admission of fault. This requirement aligns with ethical standards in the insurance industry, where policyholders should have a degree of control over significant decisions that may impact their professional lives.

The other options misrepresent the standard practices in insurance claims. For example, an insurer cannot unilaterally settle a claim without the policyholder's consent, as this could lead to adverse consequences for the insured. Furthermore, liability for settlement amounts typically rests with the insurer, not the insured, assuming the insurer is acting within policy limits and conditions. Lastly, while Dr. Adams may prefer to refuse a settlement, the insurer has a responsibility to manage claims within the context of the coverage and