Insurers usually have a proper to conduct a full, truthful, and thorough investigation of a declare. Relying on coverage language, one investigative software accessible to insurers is the examination underneath oath, or an “EUO.” In an EUO, a consultant of the policyholder is sworn-in, and an worker of or lawyer for the insurer asks questions associated to the declare. EUOs could also be a situation precedent to protection, that means failure to seem and adjust to an affordable EUO request could void protection for the declare. See, e.g., High quality Well being Provide Corp. v. Nationwide Ins., No. 2021-06955, 2023 WL 3486573 (N.Y. App. Div. Might 17, 2023); Raymond v. State Farm Hearth & Cas. Co., 614 F. Supp. 3d 1303 (N.D. Ga. 2022).
The EUO Request
An EUO request is often made in a written letter from the insurer or its lawyer. The request will quote the related coverage provision that provides the insurer the precise to take an EUO. It might (however doesn’t should) establish subjects the insurer needs to cowl within the EUO. The request will specify the EUO’s time and place, nevertheless it ought to enable the policyholder an opportunity to counsel a unique time if there’s a scheduling battle.
EUO requests could embrace a listing of doc and knowledge requests, generally referred to as “requests for info” or “RFIs.” Responsive paperwork could also be produced earlier than the EUO or the policyholder could convey the paperwork to the EUO.
EUOs often happen at an workplace constructing or a legislation agency close to the positioning declare’s location or in any other case handy to the policyholder. A court docket reporter must be current for the whole continuing. The court docket reporter will swear within the policyholder and file the alternate.
An EUO is taken into account sworn testimony. The policyholder should testify in truth, though in some jurisdictions she or he could assert a constitutional proper in opposition to self-incrimination (i.e., “plead the Fifth Modification”). The policyholder consultant mustn’t speculate or testify about info she or he doesn’t recall.
A policyholder is allowed to have an lawyer signify them on the EUO.
When do insurers request an EUO?
Most declare’s investigations don’t contain an EUO. Whether or not an insurer decides to take an EUO on the declare’s info and points. EUOs are sometimes used on the finish of a declare’s investigation course of when the insurer has gathered conflicting or incomplete info throughout its investigation. So, if there have been any modifications throughout the declare’s presentation, the policyholder must be ready to clarify them on the EUO. As an illustration, if there was a rise in the fee or scope of restore after a loss, the policyholder must be ready to testify about what triggered the change.
Failure to Comply
Usually, insurance policies deal with compliance with an EUO request as a situation precedent to protection, that means an insurer could deny protection for the declare if the policyholder doesn’t comply. See, e.g., High quality Well being, 2023 WL 3486573 (N.Y. App. Div. Might 17, 2023); Raymond, 614 F. Supp. 3d 1303 (N.D. Ga. 2022).
Adequacy of compliance exists on a spectrum from complete failure to seem for the EUO, to failure to reply to related, materials questions, to failure to reply to irrelevant, non-material questions. An insurer’s proper or means to disclaim a declare based mostly on compliance with an EUO situation will depend on the coverage language and the legislation within the related jurisdiction.
Ideas for Policyholders
EUO requests could look like casual invites to speak together with your insurer about your declare. Don’t be fooled. EUOs are recorded, sworn testimony, akin to a deposition or witness examination at trial. Failure to conform or insufficient compliance could end in lack of all protection for the declare and even an insurer’s try to void the coverage utterly.
Policyholders ought to put together for an EUO and related RFIs with the seriousness EUOs and RFIs require. That preparation will usually be guided by in-house or outdoors counsel. Policyholders also needs to contemplate retaining efficient, skilled counsel to signify them on the EUO, very like throughout a deposition.