A claims dispute where a neutral third party intervenes to make a binding decision is known as?

The correct answer, arbitration, refers to a process where a neutral third party, known as an arbitrator, is appointed to resolve a dispute between two parties. The arbitrator reviews the evidence presented, makes a determination based on the facts of the case, and delivers a binding decision that both parties agree to abide by. This process is typically more formal than mediation and is often used in contractual disputes, including those involving insurance claims.

In contrast, negotiation involves the parties directly communicating with each other to reach a mutual agreement without the involvement of an external third party. Mediation, while also involving a neutral third party, differs in that the mediator facilitates discussions between the parties to help them reach a consensus, but does not render a binding decision. Litigation refers to the process of taking a dispute to court, where a judge or jury will make a determination, but it is generally more time-consuming and costly than arbitration.