The Internet has proven itself as a valuable business tool, including the opportunity to effectively communicate information with a large audience. That opportunity can, however, backfire if proper care is not taken.

Ordinarily, notes analyzing a pending claim would be covered by an attorney client or work product privilege. The privilege can be waived if the communication is disclosed to a third party. A federal court in Maryland recently held that an insurance company's inadvertent posting of claim notes on a web site accessible by the claimant's insurance agent was a waiver of the privilege with respect to those notes. On eight separate occasions over several months, a Continental Casualty Company insurance adjustor posted detailed notes on a web site analyzing a pending lawsuit filed by Under Armour Inc. Even though access to the web site was restricted to authorized users, Under Armour's insurance agent was authorized to access the site and thereby obtained the claim notes. The company then filed a motion asking the court for a ruling as to how the company could use the notes in the lawsuit.

The court held that the postings constituted a disclosure of information to an adversary and that, in so doing, the insurance company waived any attorney client or work product privilege that would have otherwise protected the notes. The lesson to be learned is to take extra care before launching online postings when the subject matter is sensitive information about your business, such as analysis of pending claims or disputes.

For an article with more information, Kathy Ossian, Leader of our Information Technology Team, or call her direct at 313.496.7644.