Sometimes, there may be a question about whether the insurer properly investigated the claim to determine whether the allegations fell within the policy terms. In those cases, your deposition may be relevant.

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

But if there is no coverage to begin with, counsel may still be able to successfully object to the deposition by convincing the court that claims-handling was not the cause of any damage given the absence of coverage. Alternatively, and depending on the jurisdiction, counsel may be able to persuade the court to delay the deposition until the threshold question of coverage has been decided.

2. Preparation, preparation, and more preparation

Assuming the deposition goes forward, the next step is to make sure you know the file intimately. A successful deposition requires thorough preparation.

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

Second, be prepared for questions about the actions or decisions of other persons within the company involved in your file. Pay attention to the actions of prior company representatives if you did not receive the original assignment. Review notes from your supervisors. Opposing counsel may try to “trap” you by asking questions that get you to commit to one approach knowing that a supervisor or co-worker took a different one. For example, you may testify that you always obtain certain information from the insured because it is company policy to do so. Opposing counsel may then produce an e-mail from a co-worker contradicting that testimony. The contradiction may be irrelevant but it may be used to challenge your competence and truthfulness.

Finally, work with defense counsel to identify the key facts and themes that are relevant and important to the coverage decisions. Accept that the file may not have been perfectly handled; be prepared to explain errors or problems and directly address them. A good grasp of the file and a reasonable explanation for the actions taken 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 or guidelines, which counsel may or may not have obtained through prior discovery. Know whether your company has them in written form and know what they say. Consult with your attorney and with your company's regulatory department about whether the state requires such written procedures and policies. Identify the training required for your position and the factors to be considered in making discretionary decisions.

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

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

4. Be aware of key insurance regulations

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

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

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

5. Prepare for a video deposition

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

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

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