Short decision today from the Washington Supreme Court reversing the Court of Appeals on enforcement of an arbitration clause in an insurance policy. Here the farmer wanted to sue both the insurance broker and the insurer at the same time to avoid the risk of inconsistent decisions, and having to litigate in two fora. That’s a common issue. What is notable about the case is the kind of insurance policy involved: crop insurance, which is one of those features of the ag business that most people don’t know about. Crop insurance is issued by ostensibly private companies but underwritten by the federal government, and claims under those policies are tightly governed by federal law. Part of the law requires that claims be dealt with in a federal arbitration program with very limited rights of review. The law is so tight that very few folks challenge the arbitrability of these claims, resulting in a whole body of insurance coverage law being created outside of public view (except for the very intrepid) in an industry where losses are frequent and sometimes enormous. Whether that’s good public policy is for others to debate, but at least you know why you don’t see courts issuing decisions on crop losses.
