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The international relations literature typically portrays mediators as effective agents of dispute de-escalation. Upon mediation onset rivals are expected to lower the flames of conflict and enter into negotiations. We argue, however, that the mediator’s presence may actually prompt and facilitate conflict escalation, particularly immediately following the onset of mediation. We argue that this effect is facilitated by two mechanisms, one strategic and the other psychological. Hostilities which may be motivated by rivals' strategic need to signal resolve may be energized by the belief that the mediator will curb retaliatory actions. In this sense, the mediator is perceived as an ‘insurance policy’, reducing both the perceived likelihood and potential costs of escalation. To explore this phenomenon, we track rivals’ behavior patterns in the six-month period before and after mediation onset in intrastate conflicts, 1995-2010. We find that in 42% of the conflicts, the arrival of the mediator was significantly associated with increased hostilities. We discuss this pattern and examine factors that might be linked to its occurrence.