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alternative dispute resolution provision

Alternative dispute resolution (ADR) provisions are found within professional liability policies mandating that disputes regarding the application of coverage under the policy will be resolved by ADR approaches (generally arbitration), rather than through the traditional court system.

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Some policies contain mandatory arbitration provisions, stating that disputes must be settled in this manner. In contrast, other ADR provisions afford the insured the option—but not the obligation—to submit such disputes to arbitration. The latter version of this provision is more advantageous for the insured.