For example, although the witness may have an attorney present during the EUO, he or she cannot participate in the examination. Additionally, the insured cannot plead the 5th amendment in failing to answer questions that is grounds for voiding the policy. The attorney should be able to lead the insurer through the investigation process and obtain all necessary information to properly and fairly investigate the claim. They should not be wholly focused on providing a "win" to the insurer by proving a claim is fraudulent as such an aggressive one-sided approach may ultimately subject the insurer to a bad faith claim. should be sent to the insured. The letter should cite the policy requirement for giving testimony, advise of the insured's right to be represented by legal counsel, note the time and place of the examination, request a list of necessary documents and should reserve the company's right to designate additional individuals to sit for an EUO. The date, time and location of the examination should be reasonable and convenient to the insured. The insurer should make every effort to cooperate in rescheduling the EUO, if the insured requests this, to avoid any potential bad faith claims if the insurer ultimately decides to deny coverage. If the insured does ultimately refuse to submit themselves for an EUO, this may form a valid basis for denying his/her claim. An attorney cannot take an effective EUO if an insured arrives at the examination with hundreds of pages of documents that the attorney has never seen before. As such, the attorney should request documents well in advance of the examinations and thoroughly review refuses to comply with a document request that is material and relevant to the insurer's investigation, this can also serve as a legitimate basis for denial of a claim. Preparing for the examination also requires formulating effective topics and questions in advance of the EUO. This may include comparing the insured's claim with documents and expert's reports. Discrepancies should be noted for further explanation during the examination. important to discuss the examination with the claims adjuster and the special investigation unit ("SIU")'s investigator (if any) and obtain their complete files. The claims adjuster and SIU representative will likely have information invaluable to the attorney who is conducting the EUO. It may also be appropriate to have a claims adjuster or SIU representative present during the examination. During an EUO, all questions considered material and relevant to the claim must be answered by the insured. Courts have given a broad interpretation to what an EUO may encompass. The only limitation placed on the EUO is that the information requested must be "material." Thus, the EUO may include anything considered material for purposes of determining the insurer's liability for a claim and to protect against fraudulent claims. It is important for the attorney to set the proper tone in an EUO. Remember, the primary purpose of the EUO is to gather information so that the insurer can make an informed decision regarding coverage. While it is important to be aggressive enough to test the veracity of the insured's claim, it is not a time to badger a witness. The attorney should about the claim while stating clearly that the company has made no final decision regarding coverage, but will base that decision upon the information and documents provided by the insured and the topics discussed at the EUO. Further, the EUO transcript may be discoverable in subsequent litigation. Thus, it is important for the attorney to keep in mind, during the examination, the potential ramifications of any questions asked on future litigation, including a potential bad faith claim against the insurer. Purpose of the EUO to advise the insured regarding the purpose of the examination. The attorney should remind the insured that the EUO is used to gather information so that the insurer can make an informed and correct decision regarding coverage which has not yet been made. Advise the insured that you will not conclude the EUO until the insured is satisfied that he has been afforded the opportunity to provide the insurer all information necessary to substantiate his claim. If it is clear on the record that both of these issues are understood by the insured, it may be sufficient for the insurer to win a summary judgment or jury verdict on the question of whether an insurer acted in bad faith. An EUO, effectively conducted, is a useful and expedient method for assisting the insurer in reaching its coverage decision with respect to a claim. If an EUO is properly conducted, the result should lead the insurer to a correct and proper decision to either extend or deny coverage as the evidence warrants. |