Like a triage nurse in an emergency room, claim professionals must evaluate the severity of each claim that comes their way and quickly identify the appropriate next step. The more options they have, the more likely they will be able to provide the best treatment for each claim. And for many insurers, litigation is the last remedy they want to pursue. But there are other options that minimize the risks associated with litigation in resolving disputes over coverage and claim value. By increasing the use of these alternative dispute resolution (ADR) processes, insurers can increase customer satisfaction and benefit financially.

"Litigation" is one of the property and casualty insurance industry's most alarming words. Other words about this process such as "treble damages" and "punitive damages" bring even more apprehension — a reasonable reaction considering the fact that litigation is an uncertain, costly, and economically inefficient means of resolving insurance claim disputes.

Insurers, as risk-managing organizations, dislike the uncertainty litigation promises, and therefore, must carefully pick and choose their battles. Yet aside from commonly used telephonic claim-settlement negotiations between claimants and adjusters, ADR processes have remained underutilized by the industry. There is a need to build awareness of how technology, dispute resolution proponents, and creative entrepreneurs have helped reduce the transaction costs involved in using ADR techniques to resolve the most common of claim disputes: losses that have relatively small monetary value, but are large in volume.