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BEWARE OF HIDDEN PITFALLS IN LIABILITY RELEASES

| Apr 29, 2012 | Personal Injury |

An injured person in auto accident claim will be asked to sign a release agreement with an insurance company if a settlement has been reached. Common clauses in release agreements include “release all other persons or parties” and “indemnify for all liens related to the accident“.

In the first clause, releasing all other persons or parties can prohibit your ability to bring a claim against a different tortfeasor or your own insurance carrier as both are considered “all other persons or parties“. An experienced attorney can negotiate the terms of this clause to limit the release to include only the party you are releasing from the claim.

The second clause involves indemnification. Indemnification is when a third-party (usually health insurance or your own insurance carrier’s MedPay payment) pays for your medical bills and seeks repayment from your personal injury settlement. The common clause in a release agreement is overbroad when it includes “all liens related to the accident”. This is because you may not be the only person who has liens as a result of the accident. This language would hold you responsible for liens that may be incurred by other parties. An experienced attorney can negotiate with the insurance company to limit that clause to only include the liens that you have as a result of the auto accident.

These are common examples of the hidden pitfalls in settlement release agreements. However, by having an experienced personal injury attorney review your release agreement, you can avoid these traps.

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