9 Ways for Policyholders to Preserve Privileges

Policyholders and brokers typically have substantial need to discuss highly confidential issues relating to contested claims, coverage issues and litigation. Brokers may assist policyholders in advocating for coverage or disputing an insurance company’s coverage denial or defenses to coverage, among other things. Brokers also may learn privileged information about a policyholder’s operations or legal views when securing insurance or while assisting with claims. When assisting or acting on behalf of the policyholder, brokers may become privy to confidential information, including legal advice, requests for legal advice, sensitive information necessary to receiving legal advice and discussion of coverage strategy. Unless care is taken, however, policyholders and their insurance brokers can unwittingly walk into a minefield when sharing such confidences.

Because attorney-client privilege and work product protections may be waived in some circumstances when confidential communications are disclosed to third parties, insurers engaged in a coverage fight often argue a policyholder or its attorney waives the privilege and any confidentiality by disclosing their privileged communications or work product to brokers. Similarly, other third parties, such as plaintiffs in an underlying liability action, may attempt to discover all communications between the broker and the defendant/policyholder. These inquiries can lead to expensive controversy and potentially prejudicial disclosure of sensitive information.