Consent to settle refers to which concept?

• A. Insurer may settle without insured consent
• B. Insurer may settle but often requires insured's consent for settlements involving liability
• C. Insured must settle on its own
• D. Settlements are prohibited

Answer: (B)

Consent to settle is about who must agree to a settlement when a liability claim is involved. The insurer handles the defense and can propose settlements, but when a settlement would involve admitting fault or exposing the insured to liability, the insured’s consent is typically required. This protects the insured from being bound to an agreement that admits liability or misrepresents their position, and it helps prevent exhausting policy limits without the insured’s approval. In some cases the insurer may settle within policy limits or for defense costs without the insured’s consent, but for settlements involving liability, the insured’s agreement is usually needed. That balance is why the statement that the insurer may settle but often requires insured’s consent for settlements involving liability is the best description.