Lead Practice Area: Insurance Litigation
Summary:
The initial arbitrator appointed in this matter ruled against our client’s denial of benefits, even though limits of the policy of insurance had been exhausted. We appealed the decision on behalf of our client and the case was remanded by the master arbitrator based on the issue of whether the insurer, our client, could be compelled to pay the Applicant benefits, despite the fact that the coverage limits had been exhausted. The new arbitrator appointed on remand found that although there is no clear answer to this question in the regulations or case law, the insurer should prevail in this case. The arbitrator found that our client’s policy limits had been exhausted prior to the time the Applicant commenced the arbitration, and the defense of the exhaustion-of-policy limits should be sustained. Accordingly, the Applicant’s claim for reimbursement was denied in its entirety. If the arbitrator had found contrary, in accordance with the initial arbitrator, our client would have been forced to pay above the policy limits. Until the regulations are revised or the court enters a decision clarifying the law on this issue, this appeal and subsequent remand generated another favorable decision to protect our client in future cases involving policy exhaustion.