In Starr Indemnity & Liability Co. v. Arch Specialty Insurance Co., 2026 WL 444926 (S.D.N.Y. Feb. 17, 2026), the Southern District of New York provided instructive guidance on proportionality and the discoverability of underwriting materials in insurance coverage litigation. The dispute arose after the plaintiff served broad discovery requests and third-party subpoenas seeking Arch’s underwriting files to explore whether Arch had issued policies extending additional insured coverage. The court rejected this approach, holding that expansive underwriting discovery was premature where no relevant or ambiguous policy had yet been identified. Applying Rule 26(b)(2), the court determined that the burden and expense of such discovery outweighed its likely benefit, particularly when underwriting materials were not necessary to resolve the threshold question of coverage.

The decision draws a critical boundary frequently encountered in eDiscovery: not all potentially informative data is proportionally discoverable. The court distinguished between discovery that directly advances the claims or defenses, such as policies, project-related agreements, and contractual documents, and discovery that probes confidential business processes, including underwriting analyses, pricing, and risk evaluation. Without an identified policy requiring interpretation, the court concluded that delving into proprietary underwriting practices was not an efficacious means of determining coverage. The ruling also acknowledged the competitive sensitivity of underwriting files, recognizing that alleged competitive harm may support standing to challenge subpoenas targeting proprietary insurer information.

Notably, the court underscored that proportionality is not a formality but a controlling principle. Even where information might hold contextual value, discovery must remain tethered to concrete issues in dispute. For litigants and eDiscovery professionals, the order serves as a reminder to sequence discovery logically, first establishing the existence and relevance of governing policies before pursuing deeper layers of insurer documentation. Overly broad requests, particularly those implicating trade secrets or confidential business data, face heightened scrutiny when their utility is speculative.

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