Policyholder Pulse
Businesses have been warned before about mandatory arbitration provisions proliferating in insurance policies, which require referral of coverage disputes to an arbitrator or arbitral panel and bar commencing civil lawsuits to resolve insurance coverage disputes. Other policies require the exhaustion of alternative dispute resolution (ADR) procedures, such as mediation, before a coverage action may commence. On July 17, a federal judge in the Northern District of California enforced such an ADR provision against an insurer that sued its policyholder for a declaratory judgment on coverage.