How to create a claims and defenses evidence matrix for Insurance Bad-Faith Matters

Create a claims and defenses evidence matrix by separating coverage, challenged claim handling, causation, damages, and asserted defenses into discrete propositions. Link each proposition to supporting evidence, contrary evidence, decision-time knowledge, and unresolved gaps. In insurance bad-faith matters, distinguish what the insurer knew when it acted from information developed later. The deliverable is a source-linked working table that helps counsel evaluate competing explanations, direct targeted discovery, and identify legal or evidentiary questions—not a checklist that declares liability.

When to use this workflow

Use this workflow when policyholder counsel, insurer counsel, or an in-house litigation team evaluates a denial, delayed payment, disputed valuation, investigation decision, or settlement-handling allegation. Concrete triggers include receiving the first claim-file production, preparing an adjuster examination, or reassessing allegations after expert discovery.

Identify governing substantive law, forum, policy type, and first-party or third-party posture before creating rows. A property-loss investigation and a third-party settlement opportunity require different factual propositions. For the latter, examine communications, authority, decision-maker knowledge, and alleged consequences rather than importing property-claim questions.

This guide uses a US practice orientation. Federal procedural and evidence rules below apply within their respective scope, not automatically in state proceedings or arbitration. Verify policy wording and relevant historical law for the actual matter.

What you need

Assemble a bounded source set:

• Issue documents: operative pleadings, asserted defenses, relevant orders, and counsel’s verified analysis of the applicable claims and defenses.
• Insurance documents: complete policies and endorsements, relevant applications, coverage correspondence, reservation-of-rights letters, and denial or payment explanations.
• Handling records: native claim-file exports, audit histories, attachments, adjuster assignments, supervisory approvals, relevant manuals, and third-party administrator records.
• Loss and financial records: notices, proofs of loss, estimates, expert instructions and reports, payment transactions, and records supporting each alleged loss consequence.
• Communications and testimony: insured submissions, vendor exchanges, recordings, witness statements, and settlement communications, with use restrictions flagged for counsel.

Assign stable document IDs and preserve page, paragraph, timestamp, or recording references. Maintain a collection inventory beside the matrix so “not located” never silently becomes “did not exist.” Identify the production or repository searched when recording an absence.

Use the template

The companion template is Insurance Bad-Faith Matters — Claims and defenses matrix. You can copy this table into your working document or spreadsheet. Use one row per disputed factual proposition, not one row per document or entire cause of action.

Use identifiers such as COV-01, HAND-01, CAUSE-01, and DEF-01. In Proposition / basis, separate the factual assertion from its policy provision or counsel-verified legal basis. Link related rows where one disputed fact affects several issues.

Evidence cells should contain document IDs, pinpoint citations, and a concise statement of what each source establishes. Knowledge / timing identifies the actor and relevant event, transmission, receipt, or entry dates. Gap / foundation distinguishes missing evidence from authentication, hearsay, completeness, and privilege questions.

Assessments should say “supported by identified records,” “contested,” or “unresolved,” with a reason. The final column identifies the next task, responsible person, and decision it will inform. Preserve prior assessments when new evidence changes a row.

Step by step

1. Define the competing claims and defenses

Translate pleadings and verified legal analysis into separate groups: coverage breach, challenged handling, causation, damages, and each asserted defense. Keep policy interpretation distinct from factual disputes about performance. Record who bears the relevant burden only after counsel verifies it.

For first-party property claims, questions might include whether the stated exclusion applies, whether conflicting reports reached the adjuster, and whether further investigation occurred. For third-party matters, examine the actual settlement terms, communications, authority, and information available to decision-makers. These are factual questions, not assumed legal elements.

Record: issue IDs, policy or legal bases, links between rows, and any unresolved governing-law question.

2. Establish the claim-file record and its limits

Reconcile diary entries against emails, attachments, vendor submissions, and payment records. A diary reference to an engineering report does not establish that the production includes its attachments. Check assignment changes and unexplained edits without assuming misconduct.

Identify production scope and alternative repositories. A missing report in a partial export supports a completeness inquiry, not a finding that no investigation occurred. Keep production administration in a separate tracker linked to affected rows.

For federal party document requests, Rule 34(b)(2) requires specific objections, disclosure of whether responsive material is withheld on an objection, and completion of promised production by the inspection time or another reasonable time specified in the response. Check orders and stipulations before characterizing a gap. Federal Rules of Civil Procedure, Rule 34(b)(2). (uscourts.gov)

Record: source ranges, missing categories, production limitations, and each completeness inquiry’s owner.

3. Reconstruct knowledge at each challenged decision

Identify the challenged information request, valuation change, denial, payment, or settlement response. Link it to information demonstrably available to the responsible actor then.

Separate event, creation, transmission, receipt, and diary-entry dates. A report dated before denial does not establish pre-denial receipt. A later explanation does not itself establish the contemporaneous reason for acting. Conversely, later evidence may inform a separate issue; do not exclude it merely because it postdates the decision.

For alleged delay, identify the triggering communication, receipt evidence, requested action, intervening events, and completion. Do not label elapsed time unlawful without verifying the applicable requirement and exceptions.

Record: decision date, actor, known information, disputed receipt facts, and linked chronology entries.

4. Pair affirmative evidence with the strongest contrary account

Populate both evidence columns before assessing the proposition. An inadequate-investigation allegation might rely on an unaddressed conflicting report. Contrary evidence might show follow-up inspection, unsuccessful access requests, or a documented reason the report did not answer the coverage question.

Use regulatory materials within their limits. California’s disaster-adjusting guide describes section 2695.7(d) as requiring a diligently pursued, thorough, fair, objective investigation and restricting persistent requests for information not reasonably required or material to the dispute. This supplies a jurisdiction-specific investigative question, not a nationwide standard or proof of a private remedy. California Department of Insurance, 2026 guide, p. 19. (insurance.ca.gov)

Distinguish a documented explanation from proof that its underlying investigation was sufficient.

Record: both accounts, pinpoint sources, factual distinctions, and the unresolved question.

5. Test causation and damages separately

Do not let a concerning handling entry substitute for proof of resulting loss. Create distinct rows for each pleaded consequence, such as additional repair expense, financing cost, or extended business interruption. Counsel must verify availability under governing law and applicable policy provisions.

Trace each amount to records and a reproducible calculation. Identify the allegedly causal event, when the expense arose, and competing explanations. Separate claimed policy benefits from other alleged damages and check overlapping totals.

An invoice may establish an expense without showing that delayed payment caused it. Where costs began before the challenged decision, investigate any incremental extension rather than attributing the entire amount to nonpayment.

Record: amount, calculation reference, alleged causal link, competing cause, and missing proof.

6. Evaluate evidentiary use and protected material

Separate material useful for investigation from material ready for evidentiary use. Federal Rule 901(a) requires evidence supporting identification of an item as claimed; Rule 803(6) separately imposes recordkeeping and trustworthiness conditions for the business-records exception. Inclusion in a claim file does not resolve every foundation or embedded hearsay issue. Federal Rules of Evidence, Rules 901(a) and 803(6). (uscourts.gov)

Identify authors, custodians, personal-knowledge bases, and third-party statements. Preserve original recordings and distinguish quotations from paraphrases.

Route mixed legal-business communications for privilege analysis. Federal Rule 26(b)(5)(A) requires express protection claims and descriptions permitting assessment without revealing protected information; it does not create privilege. Federal Rules of Civil Procedure, Rule 26(b)(5)(A). (uscourts.gov)

Record: foundation tasks, protection-review status, and the assigned reviewer; avoid reproducing potentially protected substance unnecessarily.

7. Convert gaps into targeted evidence tasks

Prioritize gaps by their effect on assessment. Obtaining a referenced attachment may matter more than collecting every historical manual. Frame witness questions around identifiable decisions, conflicting documents, and missing information, keeping individual recollection separate from questions about organizational practices.

In federal district court, Rule 26(b)(1) limits discovery to nonprivileged matter relevant to claims or defenses and proportional to case needs. Explain how a proposed request resolves a material matrix question, rather than treating relevance alone as entitlement to production. Federal Rules of Civil Procedure, Rule 26(b)(1). (uscourts.gov)

Record: task, owner, priority, expected decision effect, and completion status. When evidence arrives, update the source cells and explain any changed assessment.

Worked example

Fictional scenario: Alder Quay Foods submits a first-party property claim to Juniper Harbor Insurance after water enters its warehouse. Fictional policy § 4.2 excludes specified long-term seepage; the parties dispute its application. Juniper denies coverage on June 18, 2026. Alder alleges inadequate investigation and $24,000 in storage expense caused by nonpayment.

The invented production contains a field report, a June 10 email saying contractor findings are attached, a denial approval entry, and storage records. The attachment is absent. Its contents and receipt are unknown. The records support organizing questions, not concluding coverage or liability.

The matrix changes three decisions. Counsel seeks the attachment before asserting that Juniper ignored conflicting findings. The defense inquiry tests investigation underlying the rationale, not merely the existence of a denial letter. The damages inquiry isolates potentially incremental storage costs. These three representative rows do not replace separate coverage and other pleaded-damages rows.

Common mistakes

• Combining coverage and handling: Separate entitlement to benefits from the challenged conduct, then analyze their relationship under verified law.
• Treating file silence as proof: Identify the searched production and check completeness and alternative repositories before inferring nonoccurrence.
• Using hindsight: Distinguish contemporaneous knowledge from later opinions, while identifying any separate relevance of later evidence.
• Ignoring adverse documents: Enter the strongest contrary evidence and explain its effect rather than relegating it to notes.
• Converting expenses into causation: Require a supported causal explanation and allocation, not just receipts or a total.

Final quality check

• Each row addresses one proposition within an actual claim or defense.
• Legal bases match jurisdiction, policy type, posture, and relevant historical law.
• Every evidentiary description matches a checked pinpoint source.
• Contrary evidence, disputed receipt dates, and later explanations remain visible.
• Missing records are distinguished from evidence of nonoccurrence.
• Damages calculations are reproducible and avoid unexplained overlap.
• Foundation, privilege, and legal questions are resolved or expressly assigned.
• Material new evidence updates affected linked rows, with changed assessments explained.

Complete the workflow with DecoverAI

DecoverAI is the Legal Intelligence Platform for litigation and transactions. Its verified document review, evidence analysis, privilege and confidentiality analysis, chronology, and deposition-preparation capabilities can support claim-file analysis. Connect decision-time questions to chronology work and carry unresolved propositions into deposition preparation. The matrix is counsel’s work product; legal significance, source verification, and evidentiary use remain counsel’s decisions. To discuss this workflow, book a demo.

Frequently asked questions

Should each document receive its own matrix row?

No. Organize by proposition. A report may support a coverage position while raising an investigation question. Cite relevant passages in separate rows and retain document-level tracking in the collection inventory.

How should we handle a defense based on disputed facts?

Record its verified legal basis and separate factual predicates. Evaluate support, contradictions, and gaps for each. A documented denial rationale does not, without further analysis, establish every predicate of a reasonableness defense.

Can elapsed time prove unreasonable delay?

Not by itself. Record reliable trigger and completion dates, intervening requests, access problems, and explanations. Counsel must verify the governing requirement and assess those facts before assigning legal significance to an interval.

Can the internal matrix become a trial summary?

Do not assume so. Separate counsel’s analysis from proposed evidence. Federal Rule 1006 permits summaries of voluminous admissible materials that cannot conveniently be examined in court and requires access to underlying originals or duplicates. Illustrative aids instead fall under Rule 107. Reassess purpose, sources, and permissible use. Federal Rules of Evidence, Rules 1006 and 107. (uscourts.gov)

Sources

• Federal Rules of Civil Procedure, Rules 26 and 34, December 1, 2025 edition.
• Federal Rules of Evidence, Rules 107, 803(6), 901, and 1006.
• California Department of Insurance, 2026 Guide for Adjusting Property Claims in California After a Major Disaster, p. 19.

Scope: General professional workflow guidance using the October 13, 2026 research cutoff; California guidance is a jurisdiction-specific example, not a national bad-faith standard.

This guide is general information about legal workflows, not legal advice for any matter. It was drafted and reviewed with AI assistance. The worked example is fictional. Contract rights and procedure depend on the governing law, the actual wording, and the facts, so check the cited sources and the rules that apply in your jurisdiction before relying on it.