Indemnification

Indemnification is one party’s agreeing to reimburse another party for an actual loss sustained. The professional liability insurer has the obligation, within the terms of the particular policy, to defend the health care provider and to pay or indemnify him or her for any settlement or judgment rendered in favor of the plaintiff for an amount up to the policy limits. The insurer may be authorized under the policy terms to settle claims without the consent of the insured policyholder, but the defendant is customarily consulted concerning this important decision.