By: Thomas S. Tripodianos Published: February 2014

Compelling an Insurer to Produce Claims Diary and Letters

Question. Can an insurer be compelled to produce a claims diary and certain letters from the insurer’s counsel to the insurer?

Answer. Yes.

The Insurance Company issued a policy insuring the Insured’s boat, and the Insured made a claim under that policy asserting that the boat had been vandalized. The Insurance Company denied the claim. The Insureds seeks an unredacted copy of an electronic claims diary prepared by an employee of the Insurance Company, as well as certain letters from the Insurance Company's attorney to the Insurance Company. The material sought by the Insured had been created prior to the Insurance Company's denial of the claim, and the Insurance Company's attorney drafted the letters while counsel conducted an investigation of the claim on behalf of the Insurance Company. The Insurance Company argues that the material was protected by the attorney-client privilege.

The payment or rejection of claims is a part of the regular business of an insurance company. Consequently, reports which aid it in the process of deciding which of the two indicated actions to pursue are made in the regular course of its business. Reports prepared by insurance investigators, adjusters, or attorneys before the decision is made to pay or reject a claim are thus not privileged and are discoverable, even when those reports are mixed/multi-purpose reports, motivated in part by the potential for litigation with the insured.

Here the materials sought by the Insured were prepared as part of the Insurance Company's investigation into the claim, and were not primarily and predominantly of a legal character. Therefore, the Insurance Company failed to meet its burden of establishing that the materials sought by the Insured were immune from discovery because they were protected by the attorney-client privilege.

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