Understanding the EUO Condition:
What Every Claims Professional Needs to Know
The Examination Under Oath (EUO) is a critical part of the claims process, but understanding the policy language that governs it is essential. Often found under the "Duties in Case of an Accident or Loss" section of an insurance policy, the EUO condition outlines the insured’s obligations and establishes the insurer’s rights.
If you’re handling claims, it’s important to review your policy language to ensure you fully understand the EUO condition. Let’s break it down.
The Language of the EUO Condition
Most policies include language requiring the insured to cooperate, which often reads something like this:
“A person seeking coverage must... sign recorded statements, including sworn statements and examinations under oath, which we may conduct outside the presence of any other person seeking coverage, and answer all reasonable questions we may ask as often as we may reasonably require.”
At first glance, this may seem like a lot of legal jargon, but its meaning is straightforward. Let’s break it into three critical parts.
1. Conducted Outside the Presence of Others
The EUO condition grants insurers the right to examine each insured individually, outside the presence of other covered parties. For example, in the case of a husband and wife who are both insured, each must be examined separately.
This ensures each insured provides their own testimony without influence from others. If an attorney requests that both insureds be present, it’s within your rights to say no. EUOs are one-on-one proceedings between the EUO examiner and the insured.
2. Answer All Reasonable Questions
The insured is required to answer reasonable questions related to the claim. But what makes a question reasonable? It must:
- Relate directly to the claim at hand.
- Be necessary for resolving the claim or clarifying discrepancies.
For example, if a claim involves a potential financial motive, it’s reasonable to ask financial questions. If no financial motive exists, such questions may not be appropriate.
As a claims professional, always evaluate whether your questions are relevant and necessary. Unreasonable or unrelated questions could result in objections from attorneys or even claims denial challenges.
3. As Often as May Be Reasonably Required
The EUO condition doesn’t limit the insurer to a single examination. If necessary, multiple EUOs can be conducted. While this is uncommon, it may occur if the insured fails to provide requested documentation or answer all relevant questions during the first EUO.
Most claims professionals will only need to conduct one EUO per claim. However, it’s important to understand that the right to multiple EUOs exists when reasonably required.
Best Practices for Claims Professionals
To ensure compliance with the EUO condition and maintain fairness throughout the process, follow these best practices:
- Familiarize yourself with your policy’s EUO language.
- Ensure each insured is examined individually.
- Ask only reasonable, claim-related questions.
- Be prepared to conduct additional EUOs if necessary to resolve the claim.
Conclusion
The EUO condition is a powerful tool for gathering information and clarifying claims, but it must be used appropriately. By understanding and respecting the language in the policy, you can ensure a fair and effective EUO process.
Take some time to review your policies and familiarize yourself with the EUO language. With the right approach, you can make the most of this essential tool in claims handling.
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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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