In a first-party insurance situation, an insured seeks compensation from its own insurance carrier (this contrasts with third-party insurance situations, in which a third party damaged or injured by the insured seeks compensation from the insurer's carrier). Whenever an insured makes a first-party claim, the carrier normally investigates the circumstances. If the carrier denies the claim and litigates with its insured, what work product protection can the insurance company assert for its investigation files?
In 1550 Brickell Associates v. Q.B.E. Insurance Corp., No. 07-22283-CIV-LENARD/GARBER, 2008 U.S. Dist. LEXIS 83357, at *2 (S.D. Fla. Oct. 20, 2008), the court adopted the Southern District of Illinois's standard, under which "a rebuttable presumption exists that all documents prepared before an insurer denies a claim are not work product, and all those prepared after a claim is denied are." One day later, another court noted that analyzing work product claims in a first-party context "is often a moving target." Milder v. Farm Family Cas. Ins. Co., C.A. No. 08-3105, 2008 U.S. Dist. LEXIS 84665, at *3-4 (D.R.I. Oct. 21, 2008). That court adopted the District of Maine's standard -- under which the insurance company's investigation file is considered to have been prepared "'in the ordinary course of business, i.e., the business of providing insurance coverage to insureds'" unless the insurance company can demonstrate "that it reasonably considered a claim to be more likely than not headed for litigation" with its insured. Id. at *4 (citation omitted).
Lawyers involved in first-party insurance situations should familiarize themselves with the various standards that different courts follow.