N.Y. Federal Judge Stays, Rather than Dismisses, Insurance Dispute Pending Arbitration

NEW YORK — A New York federal judge has granted GIO Insurance Co.’s motion to stay a breach of contract action pending arbitration, recognizing that dismissal of the action could be appealed, thereby delaying quick resolution of the dispute through arbitration.

Judge Paul A. Crotty of the U.S. District Court for the Southern District of New York denied, however, GIO’s request to release its deposit of the $1.5 million security pending arbitration in light of New York public policy.

Marsh & McLennan Companies Inc. purchased $350 million in professional liability insurance from several carriers for errors & omissions coverage. MMC’s …