Responding to Insurance Investigations: Cooperating Fully While Safeguarding Coverage

This CLE course will guide policyholder counsel on strategies and best practices for responding to insurer investigations conducted after issuance of a reservation of rights, when carriers demand information, including privileged communications, that could be used later to challenge coverage. The panel will review the strengths and weaknesses of standard cooperation clauses, how to manage carrier information demands, special issues that arise when an investigation is geared to coverage versus defense of a claim, how to require, negotiate and draft appropriate confidentiality agreements, how to object to inappropriate requests, and the utility of the common interest doctrine.

All policies require the policyholder to "cooperate" with the insurance company's investigation in the event of loss or to perform other post-loss duties that the insurer requests. If the policyholder refuses, and the insurer proves that the refusal prejudiced the insurer, coverage could be denied.

When the insurance company requests confidential and even privileged communications and work product under a "reservation of rights," the policyholder should understand that everything it says can and will be used against it in a coverage dispute with the insurance company. These issues become more acute when an excess insurer is involved. Furthermore, privileged information shared with the insurance company could be discoverable by third parties.

Policyholders can take proactive steps to preserve the privileged defense materials while simultaneously complying with the duty to cooperate with the insurer's investigation.

Listen as this experienced panel discusses the types of requests to expect. The panel will explain how to require, negotiate, and draft appropriate confidentiality agreements, how to object to inappropriate requests, and the utility of the common interest doctrine. The panel will also explore when to consider asserting bad faith.