Hammer Clause
What this clause says
If the Insured refuses to consent to any settlement recommended by the Company and acceptable to the claimant, the liability of the Company for such Claim shall not exceed the amount for which the Claim could have been settled plus Claim Expenses incurred up to the date of such refusal.
What this actually means
A hammer clause is the price attached to your right to refuse a settlement. If the insurer recommends settling, the claimant agrees, and you say no, the insurer caps its exposure at what the settlement would have cost, and everything above that is yours. Softened versions share the excess on a stated split rather than dropping the whole amount on you.
What it means for an operator
A consent to settle right without a soft hammer is a right most operators cannot afford to exercise. That matters in senior care because there are genuine reasons to fight a claim that have nothing to do with the dollars: a settled abuse allegation appears in the survey record, in discovery for the next case, and in the marketing of the firm that brought it. Negotiate the split rather than the existence of the clause. Carriers rarely delete a hammer and frequently soften one, and the difference between a full hammer and a split in the range of fifty-fifty to eighty-twenty in your favor is what makes the consent right usable.
Program notes
Soft hammers are widely available in the specialty senior care markets and are more often granted than asked for. The split is quoted, so ask for it as a number rather than as a concept.
Why the Policy Checker does not score this
This term is worth understanding and cannot be checked from a declarations page. There is no single field that would answer it, and scoring it from an assumption would produce a confident wrong finding, which is the one thing a tool like this must never do. It is defined here and left out of the check.
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Common questions about this clause
- What is a hammer clause and why does it matter in senior care?
- Do I control whether a senior care claim settles?
- What is the difference between neglect and negligence in a senior care claim?
- How should a senior care operator size limits against nuclear verdicts?
- How does a senior care operator lower its workers compensation experience modifier?