What Does Alternative Dispute Resolution Provision Mean?

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What does Alternative Dispute Resolution Provision mean? Read on to discover the definition & meaning of the term Alternative Dispute Resolution Provision - to help you better understand the language used in insurance policies.

Alternative Dispute Resolution Provision

Alternative Dispute Resolution Provision

A clause found within professional liability policies stating that disputes regarding the application of coverage under the policy will be resolved by alternative dispute resolution (ADR) approaches (generally arbitration), rather than through the traditional court system. Some policies contain mandatory arbitration provisions, stating that disputes must be settled in this manner. In contrast, other ADR provisions afford the insured the option but not the obligation to submit such disputes to arbitration. The latter version of this provision is more advantageous for the insured.

We hope the you have a better understanding of the meaning of Alternative Dispute Resolution Provision.

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