A jurisdictional exclusion is asserted when a Responding Party believes the case falls outside the scope of the arbitration agreement. If there is an applicable jurisdictional exclusion but it is not asserted by the Responding Party, the arbitrator will hear the case.
The jurisdictional exclusions that were part of the recent trend are denial of coverage and policy limits—available in the Coverage Response workflow step (see images below). If a denial of coverage jurisdictional exclusion is not asserted, and the Recovering Party proves its case, there will be an award. If a policy limits jurisdictional exclusion is not asserted, there is a potential for an award that will exceed the Responding Party’s limits. In both instances, the only way to resolve this oversight is to file a Post-Decision Inquiry (PDI).
To reverse this trend, AF recommends that all Responding Parties carefully check their claims to determine if denial of coverage or policy limits should be asserted as a jurisdictional exclusion before submitting a response.
