Read the full policy after the loss — RTFP. In doing so, it is also important to check how disputes are to be resolved and what rules apply, including time frames for invoking them. This is especially true with foreign insurance companies where an arbitration clause will apply.
A Louisiana case involving a city in Louisiana decided last week that an arbitration agreement and the application of New York law were established even though Louisiana has a law prohibiting this . 1 The court noted the following in its discussion:
Louisiana law generally prohibits arbitration clauses. See La. State. Ann. § 22: 868 (& # 39; No insurance contracts delivered or issued for delivery in this State and covering substances which are located, resident or to be performed in that State … may contain any condition, provision or agreement … [d] depriving the courts of that State where the jurisdiction or court of law against the insurer). Nevertheless, the agreement governing the set of insurances issued by Defendant to the City of Kenner contains an arbitration clause nominally containing "[a] all matters which differ between the insured and the companies… In relation to this insurance, including its formation and validity. "to an arbitral tribunal as set forth below." Defendants must rely on a preliminary ruling law if this motion is to be granted. that this court enforces an arbitration clause if four criteria are met: "(1) there is a written agreement to mediate ndet; (2) the agreement provides for arbitration in a State that has signed the Convention; (3) the agreement arises from a commercial legal relationship; and (4) a party to the agreement is not a US citizen. "… There is no dispute that there is a written agreement to arbitration, that the arbitration agreement provides for arbitration in a signatory nation and that the agreement derives from a commercial legal relationship. There is also no dispute that two of the ten Defendants – namely HDI Global Specialty SE and Certain Underwriters at Lloyd's, London – are not US citizens, the remaining eight defendants are US citizens.
The Court upheld the provision and indicated that the whole the controversy with all insurance companies would go to arbitration.I have warned about this earlier in Choice of Law and Arbitration Provisions in Texas – Watch out for those regulations that may apply laws in another state :
As a warning to policyholders, public adjusters and contractors involved in insurance with these provisions, please get the law idical advice. You may think that these provisions are unenforceable and find out that they are enforceable, and you lost your rights to collect otherwise available coverage benefits.
Although I did not think of that when we opened offices in New York and New York Jersey after Superstorm Sandy, my New York legal license and familiarity with New York's insurance law becomes relevant even with losses in other states because many of these provisions require New York law to apply.
Insurance agents who sell insurance through these arbitrations. Clauses should warn their policyholders of these provisions before selling the product. New York's insurance laws generally have less consumer protection for policyholders, and it is certainly much more expensive to mediate a case in New York rather than where the policyholder's loss occurred.
Thought For The Day
If the Department of Education is serious about fighting for students and protecting taxpayers, a complete ban on mandatory arbitration clauses is a matter of course.
9014163] City of Kenner v. Cerftain Underwriters at Lloyd & # 39; s, London No. 21-2064 (ED La. 2 February 2022).