Why Send Questionnaires?


There are many reasons for policyholders to send Questionnaires:

  • Complete responses by a liability insurer and dependent counsel should illuminate its coverage positions and potential conflicts of interest;
  • Unsatisfactory responses may indicate untrustworthiness;
  • Sending of Questionnaires develops admissible evidence of disqualifying conflicts of interest and breaches of fiduciary duties;
  • Policyholders may follow up by orally answering each question, checking the boxes, and sending completed for to the recipient for comment and correction;
  • Questionnaires may serve as a deposition outline;
  • The Ethical Compliance Questionnaire expressly withholds consent and authority for dependent counsel to represent the policyholder until potential conflicts of interest have been analyzed and disclosed;
  • Irresponsible insurer and unethical dependent counsel who are already in violation of fiduciary duties to the policyholder/client may be motivated to settle the liability dispute.

Four Possible Questionnaire Responses

Questionnaires may evoke only four possible responses: 1) truth; 2) untruth; 3) silence; and 4) settlement. Responsible insurers and ethical lawyers will have nothing to fear in responding to the Questionnaires truthfully. Others may choose to lie. Still others may recognize that Questionnaires hit them where it hurts – in their breaches: insurers and their lawyers who fear that they have breached fiduciary duties to the policyholders may be afraid to respond at all. The remaining option is settlement, which may avoid the penalties of telling lies and excuses silence by making both the policyholder and the plaintiff happy.

Insurer’s Duty to Respond to Questionnaires

Liability insurers are required to respond to inquiry. “Upon receiving any communication from a [policyholder] that reasonably suggests that a response is expected, every [insurer] shall immediately, but in no event more than fifteen (15) calendar days after receipt of that communication, furnish the [policyholder] with a complete response based on the facts as then known by the [insurer].” [1]

Truthful responses will inform the policyholder whether the insurer accepts full coverage, denies all coverage, or a little bit of both. “Upon receiving proof of claim, every insurer shall immediately, but in no event more than forty (40) calendar days later, accept or deny the claim, in whole or in part. Where an insurer denies a claim, in whole or in part, it shall do so in writing and shall provide to the [policyholder] a statement listing all bases for such denial and the factual and legal bases for each reason given for such denial which is then within the insurer’s knowledge. Where an insurer’s denial is based on a specific policy provision, the written denial shall include reference thereto and provide an explanation of the application of the provision to the claim.” [2] This regulation requires an insurer to respond to a policyholder’s cry for “help” with a simple “Yes”, “No”, or “Maybe”. The insurer must immediately “accept claim in whole” (“Yes”); or deny the claim in whole (“No”); or accept and deny the claim in part (“Maybe”), usually by issuing a reservation of rights letter.

Clarity of a reserving insurer’s coverage position helps a policyholder to be able to protect herself from a reserving insurer. “Through reservation, the insurer gives the insured an opportunity to take any steps that it may deem reasonable or necessary in response.”[3] While regulations require responsible insurers to voluntarily tell the policyholder everything, Questionnaires make a valuable, written record that irresponsible insurers have breached their duties.

Dependent Counsel’s Duty to Respond to Questionnaires

Dependent counsel owe parallel duties of disclosure and to respond to inquiry. “Adequate communication with clients is an integral part of competent professional performance as an attorney.”[4] “All attorneys owe a duty to communicate adequately with their clients.”[5] “It is the duty of an attorney: To respond promptly to reasonable status inquiries of clients and to keep clients reasonably informed of significant developments in matters with regard to which the attorney has agreed to provide legal services.”[6]

Policyholder’s Power

Policyholders wield great power over liability insurers and their lawyers in potential conflict of interest situations because: 1) dependent counsel owe them fiduciary duties[7]; 2) insurers owe them fiduciary-like duties[8]; 3) dependent counsel always represent dual clients[9]; 4) a response to a summons is due in only 30 days[10]; 5) dependent counsel must clear potential conflicts of interest before responding to a summons[11]; 6) dependent counsel must have the policyholder’s authority to appear in court[12]; and 7) dependent counsel may not accept employment or compensation from an insurer without the policyholder’s informed written consent[13]. Quite properly, the law heavily favors the naive client over the sophisticated and regulated insurer and lawyer.

Sending Questionnaires Can Encourage Settlements

Asking tough questions may tap into the three things that insurers and their lawyers fear most: 1) the unknown; 2) making bad law; and 3) bad faith liability. Settling the plaintiff’s liability dispute may allay all three fears.

Satisfy a Pleading Requirement

Many reported California opinions have emphasized the policyholder’s failure to develop admissible evidence of conflicts of interest. In one notable case, the court stated: “We conclude the facts alleged by [the policyholder] do not support its claim of a conflict of interest with [the insurer]. . . . [The policyholder] argues . . . without giving any explanation about how [and] offers a host of allegations about how [the insurer] will control the litigation without describing how this is occurring. . . . [The policyholder] is alleging conclusions without substance, not facts. As Gertrude Stein famously said about Oakland, there is no there there.”[14]


Policyholders who withhold consent and authority for dependent counsel to represent them until receipt of complete responses to the Questionnaires are likely to be accused of violating the cooperation clause of the policy. However, no reported opinion in California or in any other American jurisdiction has ever litigated and held that asking proper questions violates the cooperate clause. Indeed, the most that is clearly required of the policyholder by the cooperation clause is to show up and respond truthfully in discovery and at trial.

[1] Cal. Code Regs. § 2695.5(b) (ellipses omitted).

[2] Cal. Code Regs. § 2695.7(b)(1) (ellipses omitted).

[3] Buss v. Superior Court (1997) 16 Cal.4th 35, 61, fn. 27 (ellipsis omitted).

[4] Calvert v. State Bar (1991) 54 Cal.3d 765, 782.

[5] Id. at 785.

[6] Bus. & Prof. Code § 6068(m).

[7] See, Compendium of Attorney Duties at DutytoDefend.com.

[8] See, Insurer-Policyholder Fiduciary-Like Relationship at DutytoDefend.com.

[9] See, Dependent Counsel Always Represents the Insurer at DutytoDefend.com.

[10] “ [A] summons shall . . . contain [a] direction that the defendant file with the court a written pleading in response to the complaint within 30 days after summons is served on him or her.” (Code Civ. Proc. § 412.20).

[11] See, Non-Delegable Duty to Comply with Rule 1.7 at DutytoDefend.com.

[12] “. . . without authority appearing as attorney for a party to an action or proceeding constitutes a cause for disbarment or suspension.” (Bus. & Prof. Code § 6104.)

[13] “A lawyer shall not accept compensation for representing a client from one other than the client unless: . . . the lawyer obtains the client’s informed written consent.” (Rule 1.8.6 (ellipses omitted).) “(e) ‘Informed consent’ means a person’s agreement to a proposed course of conduct after the lawyer has communicated and explained (i) the relevant circumstances and (ii) the material risks, including any actual and reasonably foreseeable adverse consequences of the proposed course of conduct. (e-1) ‘Informed written consent’ means that the disclosures and the consent required by paragraph (e) must be in writing.” (Rule 1.0.1(e) (ellipses omitted).)

[14] Centex Homes v. St. Paul Fire & Marine Ins. Co. (2015) 237 Cal.App.4th 23, 31-32.

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