Labor & Employment Law Daily Wrap Up, NAA CORNER—The alpha and omega of professional liability insurance, (Aug 12, 2026)

By Luella E. Nelson, NAA Member

Arbitrators of all levels of fame and experience have been subpoenaed and sued.

I have spent more than a decade informally helping fellow NAA members who have been sued or subpoenaed. I’m not an insurance agent, nor do I offer legal advice. But I can offer this advice: every arbitrator should have professional liability insurance.

• Arbitrators of all levels of fame and experience have been subpoenaed and sued.

• Even if the arbitrator wins, the legal costs can go into five figures, and the first digit is not necessarily a “1," especially with a litigious pro se plaintiff and a judge that lets them keep re-filing and amending.

• Some public agencies require the arbitrators they use to have insurance naming the agency as an "additional insured.” That is usually available at a small additional cost. Other add-ons include riders for ERISA work, mediation, and other neutral services.

Given that you need to have professional liability insurance, this article may be more than you ever wanted to know about it, but good to know if you are in one of these groups:

1. Arbitrators who have not previously had professional liability insurance.

2. Arbitrators who had professional liability insurance, but it lapsed (the bill got lost in a stack of correspondence; they went on a lengthy world-wide tour and didn’t get back in time to send the check; they started to retire but just couldn’t give it up).

3. Arbitrators who are closing their practice and deciding what to do, insurance-wise, about potential claims or subpoenas from closed cases.

1.The “never hads” have the easiest time.

Multiple insurance companies write professional liability insurance for arbitrators and other dispute resolution neutrals through state bars and other professional associations. (Caution: your state bar may not consider arbitration to be the practice of law, and therefore their regular policy may not cover it; you should ask.) Often it is “claims made” insurance, meaning that it must be in place when the subpoena is served, lawsuit is filed, etc. The application form requires that you disclose potential or existing claims of which you are aware.

Insurance companies often write new coverage with no retroactive date, meaning that you are covered for any claim occurring within the policy period regardless of whether the event triggering the claim occurred before the start of the policy. You will see in the next section why that’s important.

2.The “used to haves” have a potential hazard in reinstating coverage.

If it’s only a hiatus of a week or two, it might be reinstated with no problem.

If it’s a longer hiatus—say, a few months—an insurer might decide to issue the policy with a retroactive period starting the day they issue it. That means that the arbitrator would NOT be covered if the event triggering the claim occurred before or during the hiatus in coverage. The purpose of this practice is to keep arbitrators who just got into hot water from rushing out to reinstate their lapsed policy before the suit is filed.

An arbitrator with a lengthy hiatus in coverage can request to have the policy issued with no retroactive date when they apply to reinstate it. With that request, they must submit a statement saying they know of no pending claims. The underwriters’ decision is partly based on the insured's claims experience. If they grant the request, the insured is in the same position as Group #1, above. If they deny it, the insured is not covered for suits or subpoenas related to work they did before and during the hiatus.

If you have had a hiatus in coverage of more than a week or two, your options include:

a. Request to have no retroactive date when you apply to reinstate your coverage, and include the required statement that you are unaware of any pending claims (assuming that is so); or

b. Get professional liability coverage from a different insurer. There is no hiatus with them, and many insurers don’t ask whether you previously had coverage elsewhere. So you may get a policy with no retroactive date.

3. The “I’m outta here” folks have a different concern: later suits or subpoenas arising from work they did before retiring.

Remember, with "claims made" insurance, you need to have a policy in place when someone sues or subpoenas you, including after you retire. Arbitrators who are no longer doing the kind of work covered by their policy should ask their insurer for "tail coverage," which covers them for any claims arising from acts they took before their regular policy ended. It may be automatically available when you cancel a policy, and renewable year by year thereafter on request.

Tail coverage is cheaper than the regular policy because there will be fewer chances to generate new claims (since there will be no new hearings, decisions, etc.).

The question is, how long to keep it? Many people who do ERISA work keep it for 7 years. After that, almost any potential lawsuit has probably passed the statute of limitations in most states. However, if a lawsuit is in a slow jurisdiction, it could take a few years to get to the point where, for example, the arbitrator is subpoenaed. Some arbitrators have kept tail coverage for as long as 10 years for "peace of mind;" others have not renewed after the first year. It’s a judgment call.

And, of course, if an arbitrator retires, then unretires and starts generating risk again, they need to get back on a regular policy ASAP.

For arbitrators who are sued or subpoenaed, a compilation on arbitrator immunity and privilege can be found at https://naarb.org/reference-materials/. It is not intended as legal advice, but is a start in the research process. And neither immunity nor privilege keeps you from incurring attorney’s fees to defend against a lawsuit or subpoena. NAA members should call me or an Alternate Coordinator immediately after being served.

Final word: Get and keep professional liability insurance.

About the author. Luella Nelson is a labor arbitrator in Oregon and California. She is a member of the National Academy of Arbitrators and the NAA Legal Representation Fund Coordinator.

Companies: National Academy of Arbitrators

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