Depositions vs. EUOs: Understanding the Key Differences
While both depositions and Examinations Under Oath (EUOs) involve sworn testimony and a court reporter, they serve entirely different purposes and exist in separate stages of the claims process. Understanding these distinctions is critical to ensuring your investigations remain fair, compliant, and effective.
Let’s break down how depositions and EUOs compare, and why it’s vital not to treat them the same way.
What Are Depositions?
A deposition is a question-and-answer session conducted under oath during the litigation process. Depositions are governed by court rules and take place after a claim has entered an adversarial stage.
Key features of depositions include:
- Litigation Context: Depositions occur only after litigation begins, meaning the process is inherently adversarial.
- Rules of Civil Procedure: Depositions are governed by legal rules, ensuring both sides follow structured procedures.
- Adverse Action: Depositions are typically conducted when one party has initiated legal action, such as a lawsuit.
In a deposition, the goal is often to build a case against the opposing party, making the tone and strategy inherently more contentious.
How EUOs Differ from Depositions
The Examination Under Oath, on the other hand, occurs during the pre-litigation stage and is governed by the terms of the insurance policy. Unlike depositions, the EUO is designed to gather information to clarify the claim and determine coverage—not to litigate disputes.
Key distinctions include:
- Contractual Right: The EUO is a right granted under the terms of the insurance policy, not by law or court rules.
- Non-Adversarial Nature: The EUO is not an adversarial proceeding. Its purpose is to gather facts and explore coverage options, not to fight against the insured.
- Focus on Coverage: In the EUO stage, the insurer should prioritize finding coverage and resolving discrepancies, rather than adopting a combative stance.
The Risks of Treating EUOs Like Depositions
One of the most critical mistakes insurers can make is allowing outside counsel to approach an EUO as if it were a deposition. This can lead to:
- Bad Faith Exposure: Aggressive or adversarial tactics during an EUO can expose the company to bad faith allegations.
- Customer Mistreatment: Adopting a combative approach undermines the purpose of the EUO and damages the relationship with the insured.
- Increased Litigation Risk: Mishandling an EUO can escalate disputes, pushing the claim into litigation unnecessarily.
Best Practices for Managing EUOs and Depositions
To avoid confusion and protect the integrity of the claims process, keep these best practices in mind:
- Understand the Context: Recognize that depositions are part of litigation, while EUOs occur in the pre-litigation stage.
- Hire the Right Counsel: Ensure outside counsel conducting EUOs understands the differences and avoids treating them like depositions.
- Prioritize Coverage: Approach EUOs with the intent of resolving issues and affording coverage whenever possible.
Conclusion
Depositions and EUOs may share some procedural similarities, but they are fundamentally different in purpose and context. By understanding these distinctions and approaching EUOs with the right mindset, claims professionals can protect their companies, build trust with insureds, and resolve claims more effectively.
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Danny Vazquez
Danny Vazquez is the National EUO, LLC CEO.
Danny is a central leader on Claims, Investigations and EUOs in the insurance and legal industries.
As CEO, Danny took the knowledge and insights gained throughout his 25 plus years legal career to establish National EUO as the Nation's leading company on EUO services and EUO training.
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