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📜 '''Release''' is a legally binding document in which a [[Definition:Claimant | claimant]] relinquishes all current and future rights to pursue further [[Definition:Claim | claims]] against an [[Definition:Insurer | insurer]] or [[Definition:Insured | insured]] party in exchange for an agreed [[Definition:Settlement | settlement]] payment. In insurance [[Definition:Claims management | claims handling]], obtaining a signed release marks the definitive closure of a file — it converts an open [[Definition:Loss reserve | reserve]] into a fixed, final payout and eliminates the risk that the same loss will generate additional litigation or demands down the road. Releases are standard practice across [[Definition:Liability insurance | liability]], [[Definition:Workers' compensation insurance | workers' compensation]], [[Definition:General liability insurance | general liability]], and many other lines.

⚙️ The mechanics vary by jurisdiction and claim type. In a typical [[Definition:Bodily injury | bodily injury]] liability settlement, the adjuster or defense counsel drafts a release that identifies the parties, describes the underlying occurrence, states the consideration (the dollar amount paid), and includes broad language discharging the insured and insurer from any further obligation. Some releases are "general" — covering all claims of any kind between the parties — while others are "limited" or "partial," preserving the claimant's right to pursue unrelated matters or additional responsible parties. In [[Definition:Workers' compensation insurance | workers' compensation]], many states require that settlement releases (sometimes called compromise-and-release agreements) be approved by a [[Definition:Workers' compensation board | workers' compensation board]] or administrative law judge to protect injured workers from accepting inadequate terms.

🛡️ A properly drafted release is one of the most powerful tools for managing [[Definition:Loss development | loss development]] and [[Definition:Incurred but not reported (IBNR) | IBNR]] uncertainty. Without it, a closed claim can reopen years later — sometimes called a [[Definition:Reopened claim | reopened claim]] — driving unexpected reserve strengthening that disrupts [[Definition:Underwriting result | underwriting results]] and [[Definition:Reinsurance | reinsurance]] recoveries. Insurers invest considerable effort in ensuring that release language is airtight, compliant with local law, and clearly understood by the signing party, because a release that is later voided on grounds of [[Definition:Fraud | fraud]], [[Definition:Duress | duress]], or ambiguity can cost far more than the original settlement.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Settlement]]
* [[Definition:Loss reserve]]
* [[Definition:Subrogation]]
* [[Definition:Reopened claim]]
* [[Definition:Compromise and release]]
* [[Definition:Claim closure]]
{{Div col end}}

Definition:Release - Revision history

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