ARBITRATION WORLD Tilting the Balance: the Expanding Use of Pro-Insurer Arbitration Clauses in International Insurance Policies By Thomas E. Birsic and Max Louik (Pittsburgh) INTRODUCTION For the past several decades, insurance companies have inserted binding-arbitration provisions into their policies with increasing frequency. When a dispute arises over whether a claim is covered under the insurance policy, the type of arbitration mandated by these policies can stack the deck in the insurer’s favor—at least as compared to how the same dispute would play out in U.S. courts, for example. While it is certainly best to address any such “pro-insurer” arbitration provisions prior to placement, another avenue may be to consider whether, in certain jurisdictions, such provisions conflict with the applicable state laws regulating insurance. THE RISE OF BINDING ARBITRATION PROVISIONS IN INSURANCE POLICIES After the collapse of the U.S. excess-liability-insurance market in the mid-1980s, several excess-liability insurers set up shop in Bermuda to continue provide access to excess coverage, albeit on different terms than in the past. This so-called “Bermuda Form” coverage requires arbitration in London under English procedural law and the application of a modified version of New York law to policy interpretation issues. Notably, the Bermuda Form purports to set aside rules of construction that traditionally favor the policyholder, such as the reasonable expectations doctrine and contra proferentem, which calls for construing ambiguities against the drafter of the policy (typically the insurer). 49