Policy Limits and Unknown Exposures? Request a Deferment

Image of a woman thinkingWhen an Applicant files arbitration seeking damages less than the Respondent’s policy limits, arbitration would have jurisdiction over this claim.

If there are other claims arising from the same loss, the Respondent needs to make and support this argument. Ideally the evidence will prove the amount of damages sought, and how the aggregate amount exceeds the policy limit. This will help the arbitrator determine if there is jurisdiction over the claim.

Such evidence may not always be available. When other claims have not been presented or the amount is unknown, it is appropriate for the Respondent to request a deferment of the hearing. This will allow the other claims to be handled, and ensure the policy limits are not exhausted. The Deferment Justification should explain to the arbitrator why the deferment is warranted – existence and/or severity of additional claims and policy limits.

Article published in: November 2018 E-Bulletin