Joint Loss Agreement Does Not Allow Insurer to Insert Itself in Arbitration, 7th Cir. Affirms

CHICAGO — A joint loss agreement incorporated into a policy issued by Lexington Insurance Co. to a government insurance fund does not allow for Lexington’s participation in an arbitration between the fund and another insurer, a federal appeals court has affirmed.

In an Oct. 18 opinion, the 7th Circuit U.S. Court of Appeals found the JLA provided a procedure whereby the parties could “signify” an agreement to arbitrate, and that no such signals were exchanged between Lexington and the other insurers. Absent such an agreement, Lexington may not inset itself into the arbitration, the court reasoned.

In 2013, a fire …