Zubulake Litigation Hold for Insurance Coverage Denials
An insurer recently asked me whether a litigation hold is required for all coverage denials.
In Zubulake v. UBS Warburg, the United States District Court for the Southern District of New York held that: “Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Can it be said that a claims department anticipates litigation whenever it issues a denial? I don’t think so. And even if litigation is always anticipated, insurers should be spared the obligation of litigation holds because the burden would be excessive if litigation holds were required for all denials.
Surprisingly, I have not seen insurance-specific decisions this issue. I’d be interested in hearing whether anyone has litigated this issue in the insurance context.
