There are few corners of the litigation world that insurance does not touch in some significant way. Insurance can cover a wide and evolving set of risks, from cyberattacks to professional malpractice to pollution to individual directors’ and officers’ liability, and sometimes even intellectual property. Even in business disputes involving mainly breach of contract claims, there are often components of the dispute that may implicate insurance issues. Now, when nearly every business is paying extra close attention to its insurance and trying to obtain coverage for business interruption losses arising out of the pandemic, insurers are hearing from more of their customers than ever before. At the same time, mediations have gone online, as discussed generally by my colleague Conna Weiner in her article about best practices in virtual alternative dispute resolution (ADR) (It’s Showtime! What I Learned in 2020 about Doing Virtual Mediations and Arbitrations). In my view, these conditions create great opportunities for litigants to resolve their disputes quickly, with early engagement from their insurance carriers in virtual mediations.
Although Initially Reluctant, Insurers Have Warmed to Virtual Mediations
While there was some reluctance by insurers to take part in online mediations in spring 2020, that initial reluctance has largely evaporated. Insurers’ initial reluctance fell into a few categories. Some of the resistance resulted from privacy concerns, specifically with respect to the Zoom platform back in March 2020, as everything quickly transitioned from live to virtual and the Zoom platform was scaling up to address the increased need. These issues have been largely addressed as Zoom’s platform has improved. Now ADR providers such as JAMS have identified best practices for the use of Zoom for mediations, including using password protection, employing practices that are compliant with the Health Insurance Portability and Accountability Act, and disabling the recording feature.
Other resistance took the form of “wait and see.” Many insurers thought they could wait out the pandemic and then resume in-person mediations. Alas, that was wishful thinking. In fairness, many ADR locations had some in-person mediations over the summer, when virus spread was more under control. But now that we are approaching a full year of the ever-present risk of further spread, most of the “wait and see” resistance has evaporated as well. Insurers have adjusted to this “new normal.”
Last, some insurers resisted virtual mediations due to technological issues, primarily related to cameras on company-owned devices. Those issues have either been resolved as companies have rolled out improved videoconference capabilities for internal use or they have developed workarounds by having employees participate in virtual mediations through personal devices.
In my practice, I have at least one insurer participating in nearly every case and sometimes two or more. I am not aware of any insurer that has objected outright to virtual mediation. An insurer may prefer a different conference platform, whether it be Zoom or Microsoft Teams or BlueJeans.com. But in my practice, virtual mediations are happening in large numbers with meaningful insurer participation. This is good because, in my experience, early insurer involvement and engagement are critical to the success of any mediation where resolution may depend on insurance coverage.
Unfortunately, I’ve seen that in some virtual mediations where there should be insurer involvement, there is no such engagement, typically due to preventable missteps by litigants rather than a lack of insurer interest. Litigators trying to secure insurance company involvement in their virtual mediation should follow a preparation checklist. I set out an example below. Ultimately, it is critical to appreciate that our present virtual moment provides enhanced opportunities to get insurers involved earlier and more productively than ever before.
Five Tips to Help Facilitate Early Insurer Engagement in Your Mediation
Here are some suggestions for getting your insurer as involved as early as possible in your virtual mediation.
- Identify relevant insurers, provide notice of your dispute, and obtain the name and contact information of the insurance company representative early in your case. Notice is critical and easy, and yet it is often delayed. There is virtually no downside to providing notice, and the risks of delaying notice are huge, including potentially a loss of coverage under policies that would otherwise apply.
- Keep the insurance company informed as the litigation moves forward. We often assume everyone else knows what we know. They don’t. Just because you sent a notice letter and a complaint does not mean the insurance company has what it needs to evaluate the coverage, liability, and damages, information it will need to evaluate to participate effectively in a mediation. No doubt the insurance company will ask to be updated and may even have specific information requests particular to coverage or other issues. Even if the company doesn’t, if you are going to need assistance at a mediation to settle a case, it helps to have at least thought about what the insurance company may need in order to be prepared and to consider what kinds of information you are able to provide while being respectful of privilege, confidentiality, and any other concerns specific to your matter.
- Ask for a virtual conference with the carrier before the mediation is scheduled. Emailing and talking by telephone are helpful in establishing some baseline level of communications. But videoconferencing adds another level of connection. While it is not quite as good as in-person communication, a videoconference is a pretty good facsimile in helping to establish a working relationship that can be productive. This will also allow you to figure out in advance whether the insurer has a preferred conferencing platform and any security or technology issues that need to be addressed. Have a discussion about the potential mediation, and engage your insurer in the mediator selection process. Whether or not your insurer has a view on who the mediator should be, the insurer will be more likely to participate in a mediation if it was part of the pre-mediation process.
- Allow the insurance company to participate in the mediation process design. Mediation should involve some combination of pre-session calls, pre-session shared submissions, and pre-session confidential submissions. There are no rules that prescribe exactly what this process has to look like, but to the extent you are able to get the insurance company invested in and participating in the design and pre-work, you will have an advantage when you seek its meaningful participation in the mediation session itself. It is also advantageous to make sure the insurance company has access to all shared pre-mediation submissions sufficiently in advance of the session to allow for it to make adjustments and use the submissions as part of the process of evaluating the case and seeking settlement authority.
- Let the insurance company weigh in on dates and mediation structure. Virtual mediations are easier to schedule than in-person sessions and can be modular. This means that parts of mediations can take place at different times. For example, a joint session with presentations by both sides can be held in a two-hour block on one day, followed by a gap of a couple of weeks. This allows each side to digest the points made and adjust as needed before getting into the heart of negotiations. This is just one example of the many ways in which mediation sessions can be broken up into chunks and scheduled. If the insurer has particular needs that do not relate to all participants, the insurer can have a separate coverage session or a defense side session that doesn’t require the plaintiff to wait for an offer while there is discussion going on only on one side.
What is set forth above is a kind of checklist. If you follow this checklist, you are more likely to have meaningful insurer involvement. This is particularly true during the pandemic. Insurance company representatives are not traveling for cases for the foreseeable future. They are not spending days or weeks in courthouses monitoring trials, and they are not traveling to and from mediations all over the country (not every insurance company has a local office in your city or state). Instead, like the rest of us, insurance claims professionals are largely working from home. More desk time and less commuting and travel translate into more productivity, which hopefully translates into a better chance to get your adjuster up to speed and engaged. For this reason, our virtual environment has significantly improved your ability to obtain insurer involvement in mediation if timely notice is given, if the insurer has been kept informed, and if the insurer has been given an opportunity to participate in the mediation design process. OK, there are a lot of potential “ifs.” But none of these is insurmountable. And the potential payoff, having an insurer engaged and involved when coverage may be owed, is a big one and worth the effort.
Andrew Nadolna is a JAMS mediator and arbitrator in New York City, New York.
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