Category Archives: Insurance

Arbitration and Mediation of Bad Faith Insurance Claims

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A bad faith insurance claim may arise if an insurance company is accused of wrongful conduct, that is unreasonable or malicious, fraudulent or oppressive. These claims may arise when an insurance company refuses to pay benefits for a valid claim. If there is malicious conduct, this may expose the insurance company to having to pay punitive damages if the claim against it is proved.

The parties involved in a dispute of this nature may decide to try to resolve it through mediation or arbitration. In mediation, the mediator does not have authority to impose a decision on the parties. The mediator’s role is to help the parties reach an agreement together. In arbitration, the arbitrator conducts a hearing similar to a litigated case. He or she renders a legally-binding decision.

Arbitration proceeds much like a typical court case. Each side can call witnesses, present evidence and make arguments through their attorney. Mediation is more informal in nature and often levels the playing field between parties who may be on different power levels.

Both forms of alternative dispute resolution have advantages over traditional litigation. Mediation and arbitration are both confidential processes. Either one can help avoid the bad publicity potential that arises with litigation. This may be an important consideration in a bad faith case. Both processes are usually able to wrap up the case in far less time than litigation would entail. In litigation, it may take substantial time to convince an insurance company of the merits of the case. It must often be convinced that the denial of the claim was wrong. Mediation or arbitration may get the insurance company to accept this in a way that litigation might not. In some situations, the insurance company may agree to pay on the original claim to avoid the furtherance of a bad faith claim.

How Can Disability Insurance Mediation Help You Settle a Dispute?

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Woman Reading Letter After Receiving Neck InjuryInsurance disputes are some of the most common to arise in the legal industry, and disability insurance has an especially high rate of dispute.  Fortunately, mediation can be very effective for resolving these disputes and allowing the insured and insurer to walk away from the situation satisfied with the outcome.

Disability insurance mediation combines contract interpretation and personal injury legal issues.  The contract governing the relationship often needs to be examined more closely once an injury occurs and the insured requests coverage.  If the provider and the insured are unable to see eye-to-eye, mediation brings in a third-party neutral facilitator to help them address the issues at hand.  Mediation makes it possible to explore a variety of creative solutions that might not be possible in a litigated dispute.  This means it is possible for both parties to walk away satisfied with the outcome of the dispute.

The process removes the all or nothing proposition for the insured.  Success means receiving the money requested, but being just as unhappy, if not more so, with the insurance provider.  For the insurance provider, success could mean losing a client and losing means not only paying the settlement and other costs associated with the dispute in full, but also continuing with an unhappy client that could continue to present a problem.

Most disability insurance mediations are facilitated by someone who is not only an expert in communication and negotiation, but also someone familiar with insurance.  This saves time and eliminates the need to play “catch up” and wait for the decision-makers to familiarize themselves with the industry.  In mediation, the decision makers are the insured and insurance provider, and both remain in complete control of the outcome.

Resolutions are not always simple in disability insurance mediation, but when you consider the alternative, the process and outcome is much better.  There is a far greater likelihood of not only reaching a mutually satisfactory resolution, but also making the best decision possible regarding the future relationship between the insurer and insured.

Numbers and Compromise in Wrongful Death Mediation

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Mediation in a wrongful death case is often required by the courts before a civil trial can ensue.  Once regarded as an alternative to litigation, mediation (particularly in wrongful death cases) is quickly becoming a step disputants must take before litigation can occur.  This isn’t a bad thing: Mediation has quickly proven itself to be an effective and cost-saving alternative to going to court.  In addition, mediation leaves the control of the outcome in the hands of the parties in dispute—only they can decide the terms upon which they want to settle.

The mediator involved in a wrongful death mediation hearing will be an attorney who is familiar with the law relating to wrongful death claims.  While impartial, he or she will be able to advise each disputant how a judge and jury would likely rule on the case, if taken through litigation.  This knowledge often helps the parties in dispute come to an agreement more quickly, once they see that mediation offers them more control over the outcome than a judge and jury would offer.  In this respect, it is important that parties in dispute over a wrongful death accusation choose a mediator that they can both trust to give them solid, non-biased advice.

If insurance is involved, a representative from the insurance company will likely be present at the mediation hearing.  Many nursing homes, hospitals, doctor’s offices and health clinics have insurance policies to protect them from going under due to wrongful death or medical malpractice lawsuits.  Therefore, the insurance company will want to have a representative present to ensure that all details relating to the claim are dealt according to policy and according to the proper legal guidelines.

In the end, mediation is about numbers and compromise.  An honest, thorough look at the numbers involved in a claim can allow both parties to compromise in a way that allows them both to leave the mediation hearing with a sense of closure and with the sense that it was handled fairly.

Insurance Mediation

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Hurricane Katrina was the deadliest and most destructive Atlantic hurricane of the 2005 Atlantic hurricane season. It devastated much of the Mississippi and Louisiana coastlines while destroying many parts of the heavily populated city of New Orleans. Due to it being the costliest natural disaster in the history of the United States, it was an insurance nightmare.  Companies were overloaded with claims of business owners and home owners wanting immediate relief after losing their livelihood and homes to the hurricane’s deadly winds and floods.

When this type of overwhelming volume hits insurance companies, they do not have enough manpower to handle all of the claims.  The resulting situation is one in which high stress among policy holders and employees of the company makes logical decision-making even more difficult, particularly when claims are denied and when time is of the utmost essence.

When someone loses their home, the need to find a new home is a driving force in their actions.  However, when a company is backlogged with claims, the delays are understandable.  The question remains of solving the situation in the best possible way while avoiding costly delays and problems for either party.  When an insurance company fails to provide what it promises, policy holders are then left with a decision of whether or not to hire professional legal assistance to help them get what they believe their policy should rightfully provide.

This is where mediators come in.  The process of mediation, as opposed to litigation, is one of the most cost-effective solutions to resolving any dispute over insurance claims and denied (or stalled) benefits.  Mediation involves neutral, third-party and trained mediators who help both insurance companies and their policy holders avoid costly, drawn-out court battles. This type of assistance can be especially crucial in times of high stress, and can be a proven way to lower the tension so that each side can reach a satisfactory compromise.