Special Arbitration Agreement

Special Arbitration Agreement

September 2014

Agreement and Rules and Regulations

Summary: Special arbitration is designed to settle arguments among casualty insurers, self-insurers, and commercial insureds with large retentions or liability deductibles in two types of controversy: co-defendants in a third party claim or suit and overlapping coverage. The cases may involve disagreements over areas such as the respective liability for insurers that cover co-defendants in a claim or suit, the respective liability for insurers that have overlapping coverage in a claim or suit, and coverage for concurrent or primary/excess policies on first- and third-party claims.

Arbitration, as a dispute resolution device, is much less expensive than litigation since use of lawyers is not necessarily required. Unlike litigation, the proceedings are informal and can be brought before an arbitrator in a period of time much less than litigation.

Many insurance companies are part of ADR groups like the Special Arbitration Agreement below. If there is a dispute among insurance companies that belong to the group, the dispute is subject to mandatory, binding ADR. The insurance companies agree to the binding ADR to cut the cost of defense and to resolve issues quickly. The members are all insurers. The decision makers all have experience in insurance, and the dollar value is limited to the policy.

An arbitration award, once rendered, can be turned into a judgment after an appropriate petition to a court of competent jurisdiction. It is almost impossible to overturn an arbitration award unless there is some action by the arbitrator that is an abuse of the law. The special arbitration agreement consists of a compulsory and a voluntary section.

Topics covered:

Special arbitration agreement

Article first – compulsory provisions

Article second – exclusions

Article third – decisions

Article fourth – non-compulsory provisions

Article fifth – AFs function and authority

Article sixth – withdrawals

Special arbitration rules and regulations – preamble

Section one – jurisdiction

Section two – procedure

Section three – hearings

Section four – decisions

Section five – awards

Section six – administration

The text of the Special Arbitration Agreement follows. It is Copyright 2013 by Arbitrations Forums, Inc. and reproduced with permission.

Special Arbitration Agreement

By signing this Agreement, the company accepts and binds itself to the following:

Article First – Compulsory Provisions

Upon settlement* of a claim or suit, signatory companies must submit any unresolved disputes to Arbitration Forums, Inc. (herein after referred to as AF) where: