An insurance carrier that erroneously disclaimed coverage based upon a claimant's purported lack of involvement in a motor vehicle accident is afforded a qualified privilege in an ensuing defamation action

Understanding Insurance Qualified Privilege in Defamation Claims

Defamation law intersects with insurance practice in complex ways, particularly in New York’s no-fault insurance system. For legal professionals handling cases throughout Long Island and New York City, understanding when insurance carriers receive qualified privilege protection is crucial for both plaintiffs and defense attorneys navigating these challenging waters.

Case Analysis: Hame v Lawson – Qualified Privilege in Insurance Communications

Hame v Lawson, 2010 NY Slip Op 00811 (2d Dept. 2010)

I appealed a similar type of defamation case last year. Horbul v Mercury Ins. Group, 64 Ad3d 282 (2d Dept. 2009). In Horbul, the Appellate Division observed the following: “The plaintiff alleged in the complaint that the defendants committed slander per se when they reported to the police that the plaintiff had filed a fraudulent claim with them for no-fault medical benefits for his son.” They dismissed the claim, because “he complaint failed to comply with CPLR 3016 (a), which requires that a complaint sounding in defamation “set forth ‘the particular words complained of’ “

I never posted about this case because it dealt with an elementary pleading defect and added nothing to the growing body of no-fault and no-fault related issues.

But I mention Horbul because Hame now takes a similar set of facts and dismisses the defamation claim on the merits. The Appellate Division stated the following:

The Facts: A Disputed Accident and Claim Denial

“The plaintiff allegedly was struck by an automobile driven by Igal Shaul. She filed a claim for no-fault benefits with Shaul’s insurer, the defendant Response Insurance Company (hereinafter RIC). After conducting an investigation, including examinations under oath of the plaintiff and Shaul, RIC denied her claim, concluding that she had made “material misrepresentations and false statements” and that the incident was a “deliberate staged event.” The denial of claim form was sent to three medical providers who had treated the plaintiff. After a referee determined that Shaul had been involved in the accident, the plaintiff brought this action alleging that she had been defamed when RIC sent the denial to her medical providers.

The Court’s Analysis of Qualified Privilege

Contrary to the plaintiff’s contention, the Supreme Court properly granted the defendants’ motion pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action. The statements made in the denial of claim form were subject to a qualified privilege as both RIC and the medical providers treating the plaintiff had an interest in that communication (see Golden v Stiso, 279 AD2d 607, 608). In order to overcome the privilege, the plaintiff was required to allege that RIC’s statements were made solely with malice, either under the constitutional or common-law standard (see Liberman v Geldstein, 80 NY2d 429, 438; Rohrlich v Consolidated Bus Tr., Inc., 15 AD3d 561, 562). “The plaintiff failed to allege any facts from which malice could be inferred and conclusory allegations of malice were insufficient to overcome the privilege” (Red Cap Valet v Hotel Nikko [USA], 273 AD2d 289, 290; see Rohrlich v Consolidated Bus Tr., Inc., 15 AD3d at 562; Serratore v American Port Servs., 293 AD2d 464; Freidman v Ergin, 110 AD2d 620, affd 66 NY2d 645; see also Breytman v Olinville Realty, LLC, 54 AD3d 703, 704; Baker v City of New York, 44 AD3d 977, 981).”

As a final note, in Horbul, the statements were also subject to a qualified privileged since they were made to the police in the course of an investigation. As I said earlier, the Appellate Division never reached the ultimate issues in Horbul because of the elemental pleading defects in that complaint. However, the result in Horbul would have been the same had Plaintiff’s pleadings satisfied 3016(a).

Understanding Qualified Privilege in Insurance Law

The concept of qualified privilege in defamation law provides important protections for insurance companies conducting legitimate business operations. In the context of New York’s no-fault insurance system, this privilege becomes particularly relevant when carriers communicate with healthcare providers about claim denials and suspected fraud.

Elements of Qualified Privilege

For insurance carriers operating in Long Island and New York City, qualified privilege protections apply when:

• The carrier has a legitimate business interest in the communication
• The recipient has a corresponding interest in receiving the information
• The communication is made in good faith without malice
• The scope of the publication is reasonably limited to necessary parties

The Malice Standard: Overcoming Qualified Privilege

The Hame decision demonstrates that merely alleging malice is insufficient to overcome qualified privilege. Plaintiffs must provide specific factual allegations showing that the defendant acted with actual malice – knowledge that the statements were false or with reckless disregard for their truth or falsity.

Strategic Implications for Legal Practice

This case provides critical guidance for both insurance defense attorneys and personal injury lawyers handling defamation claims arising from no-fault disputes.

For Insurance Defense Counsel

When representing insurance carriers facing defamation claims, defense attorneys should:

• Document the legitimate business purpose for all communications
• Ensure claim denial communications are limited to necessary recipients
• Maintain detailed investigation records supporting good faith basis for denials
• Move promptly to dismiss based on qualified privilege where applicable

For Personal Injury Attorneys

Attorneys representing claimants considering defamation actions must:

• Carefully plead specific facts supporting malice allegations
• Comply with CPLR 3016(a) by including the particular defamatory words
• Develop factual evidence of actual malice or reckless disregard
• Consider whether the communication falls within qualified privilege protection

Broader Applications in NYC and Long Island Practice

The principles established in Hame extend beyond no-fault insurance to other areas of insurance defense practice throughout the New York metropolitan area. Understanding when qualified privilege applies can be crucial in various scenarios involving insurance communications.

Claims Investigation Communications

Insurance companies routinely communicate with healthcare providers, employers, and other third parties during claim investigations. The qualified privilege doctrine provides important protection for these necessary business communications, provided they are made in good faith.

Fraud Investigation Reporting

When insurance carriers report suspected fraud to regulatory authorities or law enforcement, qualified privilege often protects these communications, similar to the facts in the Horbul case mentioned in Jason’s analysis.

Frequently Asked Questions

What is qualified privilege in defamation law?

Qualified privilege is a legal protection that allows certain communications to be made without liability for defamation, even if the statements prove false, as long as they are made in good faith and within the scope of the privilege.

When do insurance companies receive qualified privilege protection?

Insurance companies typically receive qualified privilege protection when communicating with healthcare providers, regulatory authorities, or other parties who have a legitimate interest in receiving information about claims or investigations.

How can a plaintiff overcome qualified privilege in a defamation case?

To overcome qualified privilege, a plaintiff must show that the defendant acted with actual malice – either knowing the statements were false or with reckless disregard for their truth or falsity. Mere conclusory allegations of malice are insufficient.

What pleading requirements apply to defamation cases in New York?

Under CPLR 3016(a), defamation complaints must “set forth the particular words complained of.” Failing to include the specific defamatory language can result in dismissal of the claim.

Does qualified privilege apply to communications with law enforcement?

Yes, as demonstrated in the Horbul case, communications made to police in the course of an investigation are typically protected by qualified privilege, provided they are made in good faith.

Contact Our Insurance Defense Legal Team

Whether you’re an insurance carrier facing a defamation claim or an individual seeking to hold an insurance company accountable for false statements, our experienced legal team understands the complexities of qualified privilege law in New York. With extensive experience representing clients throughout Long Island and New York City, we provide strategic guidance tailored to your specific situation.

Insurance-related defamation cases require careful analysis of privilege doctrines and strategic pleading considerations. Contact us today at 516-750-0595 to discuss your case and ensure your interests are properly protected under New York law.

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• New York No-Fault Insurance Law
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• Contact the Law Office of Jason Tenenbaum

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Legal Update (February 2026): Since this 2010 analysis, New York courts have continued to develop the doctrine of qualified privilege for insurance carriers, and procedural requirements under CPLR 3016(a) for defamation pleadings may have been refined through subsequent appellate decisions. Additionally, regulatory changes affecting no-fault insurance claim procedures and reporting requirements could impact the scope of qualified privilege protections, so practitioners should verify current case law and insurance regulations when evaluating defamation claims against carriers.