August 2017 E-Bulletin for Arbitrators

This month's E-Bulletin topics include:

  1. Multiple Exposures and Policy Limits: Look to the Evidence
  2. Don't Get Locked Out!
  3. Member Feedback... Thank You, Arbitrators!

Multiple Exposures and Policy Limits: Look to the Evidence

Imagine you are reviewing a liability dispute involving a four-car chain collision accident. There are three parties to the arbitration: the Applicant (Car 2), Respondent 1 (Car 3), and Respondent 2 (Car 4). The Applicant (Car 2) is pursuing $8,100, which includes its insured's deductible.

Image of a diagram of the accident

Respondent 1 raised an Affirmative Defense (AD) of Policy Limits — Multiple Exposures ($10,000 limits), stated its exposure for the Applicant's $8,100 claim, and also the potential for Car 1 to make a claim. Car 1 is a 1997 Nissan Sentra without collision coverage. Respondent 1 stated that the police report documents its exposure for the damage to Car 1 (estimated at $1,500-$2,000) and did not state or support that the owner of the Nissan has made a claim against its policy.

Given the facts outlined above, should you uphold the AD and dismiss the case from arbitration, or should you deny the AD and hear the case? It is up to your discretion whether the information on the police report is sufficient to prove the exposure of Car 1. The police report might suffice as evidence to support the exposure of Car 1.

Image of two cars involved in an accident

Let's also address out-of-pocket expenses as they relate to this particular AD. The Guide for Arbitrators considers out-of-pocket expenses as support for an AD of limits as follows

"...Stating that the Applicant may have out-of-pocket expenses is not enough to uphold an Affirmative Defense for insufficient limits. There must be proof that out-of-pocket expenses exist to uphold for this reason. For the Affirmative Defense to be denied, the Applicant will indicate it will make its insured whole for out-of-pocket expenses in the Affirmative Pleadings section (Page 23)."

Arbitration is not intended for disputes that exceed a Respondent's liability limits. When an arbitrator upholds an AD of limits, the Applicant Company is still free to pursue its claim outside of arbitration.

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Don't Get Locked Out!

Image of a padlock over binary code

AF member companies select a user password expiration interval of 30, 60, or 90 days for AF's website. The selection is usually based on your company's own internal security protocol.

If the password is not changed within the three grace attempts, the account will be locked. You will need to contact your company's security administrator to have the account unlocked.

Avoid the frustration of being locked out of AF's website. Change your password upon first notice of the password expiration. If you encounter any issues with your password reset, please contact your company's security administrator.

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Member Feedback... Thank You, Arbitrators!

Thank You

The following is recent member feedback on decisions. Kudos to all on providing the high-quality decisions our membership values and appreciates.

"Everything was just very easy to read — the summary of the disputed liability decision and damages."
Thank you, Arbitrator Heather Bean!

"This was an additional damages dispute, and it appears from his decision that he did read the documentation supporting it."
Thank you, Arbitrator Don Burke!

"Her decision gave valid reasons why the decision was made."
Thank you, Arbitrator Christine Moyers!

"It was clear to me that the arbitrator took into consideration the investigation that was done. It was a claim that involved a special investigation and questions regarding potential fraud. I think the arbitrator certainly did take into consideration all of the facts that we presented in our contentions and made a good decision."
Thank you, Arbitrator Richard Majercik!

"He just provided all the reasoning, all the information. It was easy to read and understandable."
Thank you, Arbitrator Tony Governale!

"I just think the arbitrator took the points of impact in everybody's story. This was a word versus word case with no police around; she went through all the evidence that was presented, and she was pretty thorough when it came to it. This was an accident that could have gone either way."
Thank you, Arbitrator Sis Thavongsa!

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