Ohio Supreme Court Renews Coverage of Attorney-Client Privilege for Insurance Companies

After years of uncertainty for lower courts handling bad faith claims, the Ohio Supreme Court recently clarified that a trial judge must first review the documents in a claim file before turning them over to the opposing party. On February 26, 2026, the Ohio Supreme Court issued a 5-2 decision in Eddy v. Farmer’s Property Cas. Inc. Co., Slip Opinion No. 2026-Ohio-626, holding that the controversial exception to the attorney-client privilege created in Boone v. Vanliner Ins. Co., 2001-Ohio-27, has been superseded by R.C. 2317.02(A)(2).

According to the Court, privileged documents may only be disclosed:

• Upon a prima facie showing of bad faith, and
• If they are related to the attorney’s aiding or furthering an ongoing or future commission of bad faith by the client, as determined through an in camera inspection.

Eddy at ¶ 40. The Court’s decision purports to resolve decades of confusion for parties litigating bad faith claims. A little background is helpful.

In the mid-1980s, the Ohio Supreme Court began chipping away at the protections afforded to an insurer’s claim file.

Peyko v. Frederick, 25 Ohio St. 3d 164 (1986)

The Court held that once a plaintiff in a bad faith case obtains a judgment and moves for prejudgment interest, the plaintiff, upon a showing of “good cause” under Civ. R. 26(B)(3), may have access to those portions of the insurer’s claims file that are not demonstrated by the defense to be privileged attorney-client communications.

If the defense asserts the attorney-client privilege with regard to the contents of the file, the trial court shall determine by in camera inspection which portions of the file are privileged, and the plaintiff shall have access to the non-privileged portions.

Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638, 661 (1994)

The Ohio Supreme Court expanded the rule from Peyko and held that “[d]ocuments and other things showing the lack of a good faith effort to settle by a party or the attorneys acting on that party’s behalf are wholly unworthy of the protections afforded by any claimed privilege.”

Specifically, the Court declared that the only privileged matters in the file are those that relate directly to the theory of defense of the underlying case.

Boone v. Vanliner Ins. Co., 91 Ohio St.3d 209 (2001)

The Court extended the exception from Moskovitz to attorney-client communications demonstrating an insurance company’s lack of good faith in denying coverage, holding such communications to be “unworthy of protection” by the attorney-client privilege.

It reasoned, “Claims file materials that show an insurer’s lack of good faith in denying coverage are unworthy of protection.” Id. at 213.

Understanding the Outcome of Eddy

The Court in Eddy emphasized that Boone is no longer good law, and parties should adhere to the process created by the legislature. According to the Court:

Our determination that R.C. 2317.02(A)(2) has abrogated Boone makes resolution of these propositions straightforward. Questions of attorney-client privilege are to be resolved under R.C. 2317.02(A)(2).

Id. at ¶ 40.

Finally, the Court specifically addressed the potential impacts on the work-product doctrine, confirming the doctrine still applies to claims-file information “in the same manner as it applies to other materials: such materials may be disclosed ‘only upon a showing of good cause[.]’” Id. at ¶ 38.

Whether questions about discovery in bad faith cases are indeed “straightforward” remains to be seen. Regardless, insurers should keep this background in mind as they draft communications that will comprise the insurance claim file.

If you have questions about this or other labor and employment law issues, contact Lindsey Carr Siegler or another member of the Frantz Ward Litigation Practice Group.