A Second Look at the Guide for Arbitrators

Last February, the Guide for Arbitrators was updated. Along with the update, a 12-question quiz is offered and, thus far, over 800 arbitrators have completed the quiz. For most questions, the average score is 80 percent or better; however, there were three questions that seemed to stump some arbitrators. We want to take this opportunity to review these specific questions and provide some additional clarification:
  • “If the Responding party does not enter a prior payment, but they include their payment proofs to support the payment has been cashed, can the damages be reduced or the award modified to apply the payment credit?” 
The answer here is “no.” Further explanation can be found on Page 31 of the guide under the “Final Prior Payment Considerations” section. The guide explains that when the Responding party has provided evidence to support their prior payment has been cashed, payment credit can only be entered if the alleged amount was entered by the Responding party. The guide goes on to state, “the award cannot be modified or damages cannot be reduced to apply the payment credit.”
  • “The arbitrator should never adjust the claimed policy limit amount?”  
The answer to this question is “no.” The guide provides further information on Page 21 under the “Policy Limits” section as number 1. The guide reads, “There will be times it may be applicable to ‘Adjust Policy Limit Amount.’ This can occur when the policy evidence information supports a lower or higher policy limit amount.”
  • “If no denial of coverage letter has been sent to the insured, the arbitrator should?”  
The correct answer for this question is, “the arbitrator should consider any reasoning provided as to why there is no denial of coverage letter sent to the insured and review any evidence to determine if the coverage defense is valid.” This situation is explained in the third paragraph on Page 20 of the guide. It states, “If no denial of coverage letter has been sent to the insured, a Responding party should proactively address the lack of same for the arbitrator to consider as part of the No Coverage Defense.”

While the overall scores are very good, these three questions provide an opportunity to clear up any confusion in regard to these issues.

We encourage all arbitrators to attend our bi-monthly arbitrator workshops. Information for these workshops is found on the AF website by clicking on the “Training” tab, selecting “Webinar” as the Type, then select “Arbitrator Workshop” and “Enroll.” 

AF is dedicated to the continued growth and development of our member arbitrators and wants to again thank all of you for dedicating your time and effort in resolving our members' disputes.