Property Insurance 101: Everything You Always Wanted to Know About Examinations Under Oath - But Were Afraid to Ask!


Recognizing that the EUO obligation is contractual and will be interpreted by courts in favor of the insured if there is ambiguity, some insurers have drafted their policies clearly and broadly to require employees, representatives of the insured, members of the insured’s household, or others to appear for an EUO to the extent it is within the insured’s power to do so.

Many insureds retain public insurance adjusters following a loss to assist them in negotiating or effecting the settlement of the claim. 31 Unless the policy is drafted broadly enough to include them, public insurance adjusters are not required to submit to an EUO. 32 Nor is a mortgagee named in a property insurance policy containing a standard mortgagee clause obligated to submit to an EUO. 33

When it is an entity and not a person, such as a corporation or a limited liability company, the named insured may select a representative to be examined, such as an officer, director, shareholder, member, managing agent or key employee. The person chosen must be prepared and knowledgeable regarding the subjects of inquiry to allow the insurer to conduct a meaningful examination. 34

Corporate officers, directors, shareholders, and key employees and limited liability company members who submit to an EUO may be required to answer questions about their personal life and to produce personal records such as tax returns, particularly if the policy’s post-loss duties also require cooperation in the investigation of the claim. 35

When Must the Insured Appear for an EUO?

Absent any time limit in the policy, an insurer must request an EUO within a reasonable time after the loss, which, in turn, means the insured must submit to an EUO within a reasonable time after the request. 36 An insurer risks waiving its right to an EUO if it does not request the EUO until after suit is filed. 37 An insurer also may waive a breach of the EUO requirement by denying liability on grounds other than failing to submit to an EUO. 38

The insurer must give the insured reasonable notice in writing of the EUO, stating a definite time and place where the examination is to be held and designating a representative before whom the examination is to be conducted. 39 A defense based on an insured’s failure to submit to an EUO is not available if the notice or demand lacks the requisite definiteness. Examples of defective notice include notice sent only to the insured’s counsel and notice which shifts to the insured the responsibility to arrange the details of the EUO. 40

Can the EUO Requirement be Satisfied by the Insured Submitting to a Recorded Interview?

A recorded interview of an insured taken shortly after a loss does not constitute substantial compliance with the policy requirement to submit to an EUO. 41 This is so even if the interview ends with the insured stating he or she truthfully answered the questions asked and even if the insured subsequently verifies the truthfulness of the interview. 42 Likewise, the insured cannot satisfy the EUO requirement by providing answers to written questions. 43

Is the Insured Obligated to Answer Every Question Asked During an EUO and to Produce Every Document Demanded by the Insurer?

Although an insurer may conduct a “searching examination,” 44 questions posed of an insured during an EUO must be confined to matters “material” to the loss, the claim, and the insurance. The EUO notice is usually accompanied by a demand to produce documents, which is another post-loss duty required of an insured. 45 Not only must it be material, an insurer’s demand for documents (or releases and authorizations if the documents no longer exist) also must be reasonable and specific. 46 Documents and questions are material if they concern “a subject relevant and germane to the insurer’s investigation as it was then proceeding.” 47 For instance, if the insurer has a reasonable basis for suspecting a fraudulent claim, then information and documentation concerning the insured’s financial status and prior insurance losses are material to...