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When Is an Insured’s Statement Privileged?

By Peter R. Jennetten

Insurers routinely take statements from their insureds during the course of investigating and defending claims. Those statements are often protected by the attorney-client privilege, even if no attorney is involved in taking the statement. However, not all statements are privileged, and the privileges can be waived.

The Illinois Supreme Court recognized the application of the attorney-client privilege to statements taken by an insurer in People v. Ryan, 30 Ill.2d 456, 197 N.E.2d 15 (1964). After a fatal accident, Della Emberton’s insurance company took a written statement from her. She was later charged with DUI arising out of the fatal accident. Emberton’s attorney in the DUI case obtained a copy of the written statement from her insurer. He refused to produce the statement to prosecutors, citing the attorney-client privilege. The court found that the statement was taken for the purpose of defending Emberton in a future lawsuit, which the insurer was required to do. The court extended the attorney-client privilege to protect the written statement taken by Emberton’s insurer.

It is important to note that this privilege applies in third-party liability cases where the insurer is acting to protect its insured from a claim made by someone else. In first-party claims, the insurer and insured are adverse to each other, and the privilege would not apply. For example, an insured’s statement under oath in an insurer’s arson investigation would not be privileged. A statement given by an insured in support of his property damage claim after a car accident was not privileged. Dari v. Uniroyal, Inc., 41 Ill.App.3d 122, 353 N.E.2d 298 (1st Dist. 1976). A farmer’s statement to his crop insurer regarding the loss of his horseradish crop was not protected by the privilege. Boettcher v. Fournie Farms, Inc., 243 Ill.App.3d 940, 612 N.E.2d 969 (5th Dist. 1993). The farmer’s horseradish crop was damaged while in cold storage. He made a claim with his own insurer, which was denied. He then filed suit against another farmer and the cold storage company. The defendants sought the farmer’s statements to his insurer. The court held that the statements were not privileged because the statements were not taken for the purpose of defending the farmer in a civil action.

The Illinois Supreme Court recognized an exception to this rule where both of the parties involved are covered by the same insurer and are aware of this fact at the time they give their statements. If both of the insureds know that they are giving statements to an insurer who covers both parties, they do not have a reasonable expectation that the statement will remain privileged. Thus, the privilege does not apply in that circumstance. Monier v. Chamberlain, 35 Ill.2d 351, 221 N.E.2d 410 (1966). Given that insurers now often have separate adjusters handle each claim, the courts may apply the privilege even in this circumstance. However, the case remains good law for now.

The privilege can be waived just like any other privilege. A privilege can be waived by disclosing the statement to others. People v. Ryan, 30 Ill.2d at 461, 197 N.E.2d at 17-18. If the statement is shared with someone other than the insured, the insurer and the defense attorney, the privilege may be deemed waived.


Originally published in the Fall 2009 edition of Quinn Quarterly.

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