Insurance Company Perspective On Insurance Lawsuits – Part 3

Knowing how an insurance company looks at lawsuits that result after a claim is denied is valuable.  The State Bar of Texas, Insurance Law Section, publishes a journal called Journal of Insurance Law.  This Journal recently published an article discussing how lawyers who have insurance companies as clients, look at lawsuits that result from a claim being denied.

This third part of the article discusses the depositions of a corporate representative, the adjuster, and looks at experts.

Corporate representative depositions are make-or-break propositions.  Sometimes, that choice is out of the hands of the insurance lawyer and many insurance carriers have identified particular employees for whom giving testimony on behalf of the company is part of their job description.  He or she should also have an unflappable demeanor.  In addition to selecting the right witness, it is important to ensure that the deposition topics are narrowly tailored and stated with “reasonable particularity.”  It is useful to have a conversation with opposing counsel to clarify vague topics and to limit overly broad ones, as both parties have an interest in a shared understanding of the topics at issue and bringing a knowledgeable and well-prepared representative to the deposition.  When deciding whether to involve the court, it is important to familiarize yourself with the case law on both federal and state requirements to protect your client from improper corporate representative deposition notices.  For instance, depending on the jurisdiction, it may be prudent to move for a protective order instead of simply objecting to proposed topics.  Once the deponent is selected, preparation is paramount.  It is prudent to first have fact-gathering meetings.  Since a corporate representative is obligated to present the information that is available to the company, it is useful to outline what information needs to be gathered and by whom.  After those meetings are accomplished, it is then prudent to schedule at least two face-to-face meetings with the deponent.  These sessions should allow for time to practice with mock cross-examination.  This is important for experienced deponents as well as rookies.

What about the deposition of the insurance adjuster?  The deposition of the handling adjuster has been referred to as “A Stake in the Heart of the Vampire.”  While a weak adjuster witness may not cause your case to crumble into dust, it certainly will affect its defensibility.  Unlike the corporate representative, you will have no choice in selecting this witness.  Again, preparation and practice is the key to survival, but the preparation process may be even more challenging, as you take a busy adjuster away from her regular duties.  The challenge increases when the handling adjuster is no longer employed by your client.  In that case, you will need to have a conversation with your client about representing the former employee, as they likely have agreements in place governing those situations.  In preparation for the deposition, the adjuster should conduct a detailed review of the claims notes, correspondence, and any prepared estimates.  It is also important to prepare these witnesses to practice answering questions without becoming defensive.

As to experts, the insurance lawyer will want to identify causation experts early in the case.  The insurance carrier client may have already used an engineer to provide a report.  The insurance lawyer may want to have his own engineer and cost-of-repair expert reinspect the premises and give a gut check on the carriers’ initial analysis.  While it is not pleasant to have to tell an insurance company client that the initial claims analysis, coverage determination, or cost-of-repair estimate was wrong, that news is much better relayed at the beginning of the case rather than after months of litigation.  The insurance company lawyer will also want to consider whether to hire a claims handling expert, as it can be useful to have an expert explain the insurance claims process to the jury.  The insurance company lawyer should make that determination well in advance of any expert designation deadlines. T here is nobody more qualified than an insurance claims handling expert to find the quicksand in the case, and does not want to hear that news the day before designating the expert.

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