Although there is a long history of arbitration in commercial insurance disputes in the reinsurance and high excess catastrophic liability contexts, insurance coverage disputes are more often litigated in a traditional courtroom setting.
However, the procedural flexibility inherent in arbitration can be used to resolve insurance coverage disputes in an efficient and cost-effective manner. To illustrate, this article begins with an example of one creative arbitration structure developed and used by the parties to a complex insurance coverage dispute.
Then, to highlight the procedural options available in arbitration and the contexts in which those options arose, the article explores the key features of reinsurance and high excess catastrophic liability arbitrations. The discussion then returns to the ways in which arbitration has been—and can be—used to resolve all types of insurance coverage disputes, and offers tips for drafting arbitration clauses for primary and excess liability policies.