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The Rise of E-Discovery in the Insurance World

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As insurance companies face a rise in litigation matters and a multitude of compliance requirements, the wealth of electronically stored information and sensitive data that must be retained and preserved is also increasing.  Amendments to the Federal Rules of Civil Procedure that address electronic discovery and ongoing court interpretations of these rules make electronically stored information a significant component of regulatory investigations and complex litigation.  Unfortunately, these rules and court decisions, as well as evolving technologies, also create confusion for those professionals in the insurance industry who must handle or respond to discovery requests.  Due to these complexities and the wealth of information involved in insurance litigation, insurance companies are always looking for ways to improve and streamline their electronic discovery process in order to defensively manage litigation matters while also reducing expenses and managing risk.

There are many unique challenges when it comes to e-discovery within the insurance industry, in part because the industry is one of the most regulated, competitive, and complex.  When faced with litigation, insurance companies are confronted with a variety of requirements that are associated with electronically stored information and the retention and production of that information.  This is not surprising given the documentation and communications that are involved in the insurance claims process, and the magnitude and complexity of the data that flows in and out of systems to support the needs of pricing, underwriting and risk and financial management.

Since complex insurance litigation involves unique electronic discovery considerations, it is imperative that the parties involved understand the risks and benefits associated with electronically stored information in the context of insurance coverage, and that they are prepared to take on those issues from the start of litigation.  Accordingly, when faced with litigation, or even a regulatory investigation, insurance companies need to consult with an experienced attorney who understands insurance operations, the technology that is needed to support e-discovery, and who can address the specific discovery needs of the company.  A competent e-discovery lawyer can help the discovery efforts of insurance companies and assist them with the following at the earliest sign of potential litigation, or even before:

  • Develop consistent data preservation, retention, and destruction plans and policies;
  • Develop a system for maintaining and organizing data and communications;
  • Monitor developments or changes in the law in regard to e-discovery;
  • Understand preservation and retention requirements and duties when it comes to certain communications and situations;
  • Consider and understand that certain privileges may be involved and determine how to address them in unique insurance coverage actions;
  • Identify all relevant documents, assist with document production, and prepare initial disclosures or respond to e-discovery requests;
  • Assist in any e-discovery negotiations;
  • Address any production concerns from the beginning so as to avoid unnecessary costs and litigation;
  • Draft and argue any motions to compel discovery, or motions for protective orders; and
  • Ensure employees have proper training regarding records retention.

With the assistance of a litigation-focused e-discovery lawyer, and with proper policies and procedures for e-discovery and information management in place, insurance companies can tackle litigation challenges in an efficient and cost-effective manner.

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