What is the consequence if there is a violation of the consent to settle provision under an EPLI policy?

If there is a violation of the consent to settle provision under an Employment Practices Liability Insurance (EPLI) policy, the primary consequence is that the insurer may deny coverage. This provision is critical because it is designed to protect the insurer's interests by ensuring they have a say in how claims are handled and settled. When an insured party decides to settle a claim without the insurer’s consent, it can undermine the process and the insurer's ability to manage the claim effectively. As a result, the insurer may view this as a breach of the policy conditions, leading them to deny coverage related to that claim.

This understanding emphasizes the importance of adhering to all provisions within the insurance contract, as failure to do so can significantly alter the available coverage and advantages outlined in the policy. Violation of such provisions can lead to insufficient protection for the insured, ultimately resulting in financial liability without the benefit of coverage that the EPLI policy would typically provide.