Hurwitz Fine Insurance Coverage Attorneys Victoria S. Heist and Lexi R. Horton recently presented the webinar, "Understanding Attorney-Client Privilege in Claims Handling." This session explored the evolving scope of attorney-client privilege across the United States and what it means in practice, particularly in the context of claims handling, dual-purpose communications, bad-faith litigation, and the discoverability of claims files.
Below are 10 key takeaways from the discussion:
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Attorney-client privilege protects communications made for the purpose of obtaining legal advice and is intended to encourage full and candid discussions. Because the law varies by jurisdiction, understanding how and where privilege applies is critical to avoiding unintended disclosure.
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Dual-purpose communications, those combining legal and business content, are heavily scrutinized. To preserve privilege, separate factual/business communications from legal analysis, clearly tie facts to legal advice where necessary, and label communications appropriately.
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Attorneys serving both legal and business roles, particularly in-house or insurer-retained counsel, must clearly distinguish between those functions. Privilege generally applies when the dominant purpose is legal, not routine claims handling.
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The “because of” test applies to work product doctrine (not attorney-client privilege) and protects materials prepared in anticipation of litigation in the Seventh Circuit.
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Bad-faith litigation increases the risk of disclosure. Courts may compel production of otherwise privileged materials particularly where the insurer places those materials “at issue” in defending its conduct.
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As a general rule, non-privileged, relevant, and proportionate portions of a claims file are discoverable. Attorney-client communications and work product remain protected.
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To guard against overly broad discovery requests, rely on relevance and proportionality standards, and clearly document the decision to disclaim coverage consistent with jurisdictional rules.
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During deposition preparation, ensure witnesses review only appropriate, non-privileged materials to avoid inadvertently triggering disclosure obligations.
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Privilege can be waived if communications are shared too broadly in the corporate context. Limit distribution to those with a need to know, and consider separating factual summaries from legal analysis to better preserve protection.
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A proactive approach is essential: clearly establish privilege intent from the outset, draft and label communications carefully, and stay current on evolving privilege standards across jurisdictions.
We hope you found this webinar informative. If you have any questions or would like additional information, please feel free to reach out to Lexi or Victoria.
