Case Law Alerts
Ohio Supreme Court Enforces Broad Arbitration Clause in Insurance Policy, Extending to Bad Faith Claims
U.S. Acute Care Solutions, L.L.C. v. Doctors Company Risk Retention Group Insurance Company, --- N.E.3d ---, 2025-Ohio-5010 (Ohio 2025)
January 1, 2026
In this medical malpractice lawsuit filed against an emergency services provider, the insurer for the provider assigned counsel and undertook a defense on behalf of the provider. The insurer and provider then disagreed about strategy in the lawsuit and whether the claim should be settled. The provider decided to self-fund a settlement of the malpractice lawsuit in order to avoid receiving an excess verdict. The provider then sued the insurer in Ohio for bad faith claim handling, seeking reimbursement of the amount it paid in the self-funded settlement. The insurer then invoked the policy’s arbitration clause in the bad faith lawsuit. The provider argued the arbitration clause did not apply to a bad faith claim.
The policy originally contained an arbitration clause which provided that “any dispute between” the insurer and provider relating to the policy—including any disputes regarding the insurer’s extra-contractual obligations—would be resolved by binding arbitration.” That arbitration provision was then superseded by a change endorsement which stated: “Any dispute between [provider] and [insurer] relating to this Policy (including any disputes regarding [insurer’s] contractual obligations) will be resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Mediation Procedures of the American Arbitration Association.”
The Ohio Supreme Court held that Ohio law is strongly in favor of arbitration, and that if an arbitration clause is broad, all doubts must be resolved in favor of arbitration. Further, even though bad faith claims are torts in Ohio, the court adopted the reasoning of a federal court, which held that “real torts can be covered by arbitration clauses if the allegations of underlying the claims ‘touch matters’ covered by the [policy]."
The court held the provider failed to show any express exclusion of bad faith claims from arbitration. Nothing in the change endorsement showed an intent to expressly exclude legal disputes regarding bad faith insurance claim handling from arbitration.
The decision is important to the extent that broad arbitration clauses in insurance policies will be enforced even for tort claims alleging bad faith (and “creative pleading”—identifying something as a tort instead of a contractual claim—will not avoid arbitration when the dispute is related to the policy.)
