Non-Compliance with EUO Demands:
What It Means and How to Handle It
Failure to comply with an Examination Under Oath (EUO) demand is one of the most critical challenges claims professionals face. Understanding the difference between cooperation and non-compliance, as well as recognizing specific acts of non-compliance, is essential to protecting the insurer’s rights and resolving claims effectively.
Let’s break down what constitutes non-compliance and how to handle it.
What Is Non-Compliance with an EUO Demand?
Non-compliance occurs when an insured fails to meet their obligations under the policy after a valid EUO demand is issued. Importantly, non-compliance includes a wide range of actions—or inactions—that undermine the EUO process.
Here are common examples of non-compliance:
- Avoiding Receipt of the Demand
◦ The individual can decline to participate without penalty.
◦ Key Point: The insurer’s protection begins when the demand is issued, not when it is received or acknowledged. - Failure to Appear
◦ If the EUO is unilaterally scheduled and they do not appear, this is non-compliance.
◦ Insureds may fail to show up for a scheduled EUO, even if it was coordinated. - Refusing to Answer Questions
◦ Example: Pleading the Fifth in an EUO is still considered non-compliance.
◦ Insureds are required to answer all reasonable and claim-related questions. Refusal or avoidance (e.g., “I don’t recall”) constitutes non-compliance. - Walking Out or Refusing to Complete the EUO
◦ Leaving the EUO before it is completed or refusing to answer critical questions partway through is non-compliance. - Delaying Presentation
◦ Repeated delays, whether caused by the insured or their counsel, are considered non-compliance—especially when used to avoid providing necessary information. - Failure to Produce Documentation
◦ If the insured fails to provide requested documentation by the EUO date, this is another act of non-compliance.
The key difference? Unlike the EUO, the SUO is not a demanded contractual right. This means:
Each Act Counts Separately
Non-compliance isn’t a single event. Each failure—whether it’s delaying presentation, refusing to answer questions, or failing to produce documentation—is a separate act. For example, an insured who delays the EUO, refuses to answer specific questions, and fails to provide documents has committed multiple acts of non-compliance.
Why Non-Compliance Matters
Non-compliance isn’t just frustrating—it has significant implications for the claims process.
- Policy Breach: Non-compliance can result in a breach of policy conditions, potentially justifying a denial of the claim.
- Claims Delays: Failure to cooperate prolongs the claims investigation process, creating inefficiencies and potential legal exposure.
How to Address Non-Compliance
To effectively handle non-compliance, follow these best practices:
- Document Everything: Keep detailed records of all acts of non-compliance, including communications and attempts to resolve the issue.
- Set Clear Expectations: Clearly outline the insured’s obligations in the EUO demand letter.
- Follow Up Promptly: If non-compliance occurs, address it immediately to avoid further delays.
Conclusion
Non-compliance with an EUO demand can take many forms, from failing to appear to refusing to answer questions or provide documents. Each act of non-compliance is significant and must be addressed to protect the insurer’s rights and ensure a fair resolution of the claim.
Understanding these nuances is key to managing the EUO process effectively. Ready to dive deeper into mastering EUOs and handling non-compliance? Join us for comprehensive training on this critical aspect of 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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