Arbitration Agreement

An Arbitration Agreement is a legal contract between an insurance company and a policyholder in which both parties agree to resolve any disputes related to the insurance policy through arbitration rather than litigation. Arbitration is a form of alternative dispute resolution in which a neutral third party, called an arbitrator, hears evidence from both sides and makes a binding decision. Arbitration agreements are often included in insurance policies as a way to avoid the time and expense of going to court, but they can also limit the policyholder’s ability to seek legal remedies.