When it comes to insurance coverage litigation, claimsrepresentatives and their supervisors should expect to be deposedby opposing counsel. These depositions, if relevant andwell-prepared, can be critical to a successful case. Here are fivetips for achieving that result.

1. Make sure the deposition is relevant

On receiving a notice of deposition, your first step should beto discuss the relevancy of your testimony with counsel. If yourtestimony will not produce information relevant to the issues to bedecided by the court, counsel may wish to object to the taking ofyour deposition altogether. This is particularly true where thedispute revolves around the meaning of the policy language.

Virtually every state in the country views the interpretation ofan insurance policy as a question of law. Courts are to considerthe plain meaning of the words contained in the policy and applythem to the allegations of the complaint. If any of thoseallegations fit within the coverage terms, there is a duty todefend, and where liability is imposed for a covered claim, a dutyto indemnify. If none of the allegations fit within the coverageterms, there is no duty to defend or indemnify as a matter of law.Your opinion on the meaning of contract language is irrelevant;nothing you say or do not say will affect the court's legal rulingwhere the sole dispute concerns the policy language.

Sometimes, there may be a question about whether the insurerproperly investigated the claim to determine whether theallegations fell within the policy terms. In those cases, yourdeposition may be relevant.

Depositions are most likely to be relevant in “bad faith”litigation where claims-management is the focus. If the claimsrepresentative did not properly handle the claim, or made decisionsfavoring the interests of the insurer to the detriment of theinsured, or committed some egregious act, then the adjuster'sactions and motivations are relevant.

But if there is no coverage to begin with, counsel may still beable to successfully object to the deposition by convincing thecourt that claims-handling was not the cause of any damage giventhe absence of coverage. Alternatively, and depending on thejurisdiction, counsel may be able to persuade the court to delaythe deposition until the threshold question of coverage has beendecided.

2. Preparation, preparation, and morepreparation

Assuming the deposition goes forward, the next step is to makesure you know the file intimately. A successful deposition requiresthorough preparation.

First, know the history of the file and know why you took thesteps you did. Prepare an outline or timeline of events. Identifyinconsistencies or changes in strategies or decisions and beprepared to explain them. Review all e-mails, pleadings, contracts,policies, and other documents. Be fully prepared to handle anyquestion pertaining to any aspect of your handling of the file.

Second, be prepared for questions about the actions or decisionsof other persons within the company involved in your file. Payattention to the actions of prior company representatives if youdid not receive the original assignment. Review notes from yoursupervisors. Opposing counsel may try to “trap” you by askingquestions that get you to commit to one approach knowing that asupervisor or co-worker took a different one. For example, you maytestify that you always obtain certain information from the insuredbecause it is company policy to do so. Opposing counsel may thenproduce an e-mail from a co-worker contradicting that testimony.The contradiction may be irrelevant but it may be used to challengeyour competence and truthfulness.

Finally, work with defense counsel to identify the key facts andthemes that are relevant and important to the coverage decisions.Accept that the file may not have been perfectly handled; beprepared to explain errors or problems and directly address them. Agood grasp of the file and a reasonable explanation for the actionstaken is the ultimate goal in preparing for deposition.

3. Know the claims manual or guidelines

Opposing counsel may ask about the company's claims manual orguidelines, which counsel may or may not have obtained throughprior discovery. Know whether your company has them in written formand know what they say. Consult with your attorney and with yourcompany's regulatory department about whether the state requiressuch written procedures and policies. Identify the trainingrequired for your position and the factors to be considered inmaking discretionary decisions.

Some of this information may be available on the Internet or onthe company's external website. Know whether any written statementscontradict your usual practice. Read the website and check withcounsel about any discrepancies.

Depending on the coverage issue in dispute, it may be importantto consult with in-house counsel to identify cases in which yourcompany litigated the same question in other jurisdictions. It maybe important to know the documents produced or the positions takenin those cases. Your attorney may also want to research casesinvolving the company as a party on any related issues.

4. Be aware of key insurance regulations

Be prepared for seemingly benign questions from opposing counseldesigned to trap you into admitting violations of state insuranceregulations. Consult with counsel about relevant insuranceregulations in that state before the deposition.

For example, if the case involves cancellation of an insurancepolicy, review any state regulations concerning proper methods ofcancellation and know which documents the company must retain. Orif the case concerns bad faith, review any regulations or statutesas to unfair insurance practices.

Don't be afraid to respond that you do not know about companyprocedures and protocols outside of your department. For example,you may be asked about bad faith complaints filed against thecompany in the past five years. Perhaps a regulation requires thecompany to maintain those records. Compliance would likely be theresponsibility of another department and it is acceptable for youto respond that you have no personal knowledge about that aspect ofthe company's business.

5. Prepare for a video deposition

Opposing counsel may insist on a videotaped deposition in partbecause of the added tension it creates for you and in part becausedeposition preparation is typically not as thorough as trialpreparation and there may be some advantage to filming you if youare not properly prepared. Ask your attorney beforehand if therewill be video.

If the deposition will be taped, dress professionally andprepare as you would for an appearance at trial in front of a jury.Maintain eye contact, remain calm, speak slowly and enunciate, andprovide complete answers.

Jurors may dislike insurers from the start and you do not wantto reinforce that view. Be careful not to “spar” with opposingcounsel. A claims representative who is forthright, calm, confidentand engaged can make the case.