What does Mandatory Arbitration Provision mean? Read on to discover the definition & meaning of the term Mandatory Arbitration Provision - to help you better understand the language used in insurance policies.
Mandatory Arbitration Provision
A provision in an insurance policy that requires an insured to submit disputes with the insurer (typically as respects the existence of coverage) to arbitration rather than to the traditional judicial system. Arbitration can be advantageous for insureds because it normally expedites the dispute resolution process on a lower cost basis compared with court systems. However, arbitration is generally even more beneficial for an insurer, because arbitrators, compared to juries, may be less apt to award large verdicts based upon emotional issues.
We hope the you have a better understanding of the meaning of Mandatory Arbitration Provision.