Legal Issues

Failure of The Insured to Attend An EUO

An essential requisite to the duty of the insurer to pay a claim asserted against the insured is the ability of the insurer to investigate the facts and circumstances of the accident. Paramount to the insurer's ability to investigate, is the assistance and cooperation of the insured. The duty of the insurer to honor a claim coincides with the duty of the insured to cooperate with the insurer in investigating the loss. The concomitant obligations of the insured are embodied in the cooperation clause found in the conditions referenced earlier.

There are numerous cases which confirm that an insured's failure to submit to an Examination Under Oath and provide requested documents constitutes a failure to cooperate under the policy. Purvis v. State Farm, 901 F.2d 944 (11th Cir. 1990); Halcome v. Cincinnati Insurance Company, 254 Ga. 742 (1985); Hines v. State Farm, 815 F.2d 648 (11th Cir. 1987); Fireman’s Fund Ins. Co. v. Sims, 115 Ga. 939 (1901); Nichols v. Pearl Assurance Co., 71 Ga. App. 378 (1944); Townley v. Patterson, 139 Ga. App. 249 (1976); Brookins v. State Farm Fire & Cas. Co., 529 F. Supp. 386 (1982); Saft America Inc. v. Ins. Co., 155 Ga. App. 500 (1980).

Further, it is not necessary for the Insurer to show prejudice to its case in order to prevail on the issue of non-cooperation. Wolverine Insurance Company v. Sorrough, supra, the Court of Appeals held that the insurer does not have to prove that it was prejudiced in order to deny a claim based on failure of the insured to cooperate. The court found that it is generally difficult, if not impossible, to determine whether the company may have been prejudiced by any failure of the insured to cooperate. The court found that it would be impossible for a court or jury to know what the insured might have included in statements they may have given, such as particulars of the accident, names they may have listed, or leads for an investigation which might have been conducted. The court further found that failure to give reasonable, timely notice of the accident, will relieve the insurer from any obligations imposed by the contract, even though prejudice may not have resulted. The court reasoned that the insured's duty to cooperate and provide timely notice regarding the claim constituted a condition precedent to the policy so that no rights accrued under the policy until these conditions were satisfied.

The Insurer has the burden of showing, prima facie, a violation of the cooperation clause by the insured and that it had been diligent and acted in good faith in seeking to obtain the insured's cooperation. The breach, once prima facie is shown, shifts the burden to him who seeks to enforce the policy to show justification or excuse therefore. The insurer is not required to anticipate or negate all excuses or reasons that might justify denial. The breach of the cooperation clause is prima facie when it appears that the insurer made reasonable efforts to obtain the insured's cooperation, without success. Wolverine Insurance Company v. Sorrough, 122 Ga. App. 556, 177 S.E.2d 819 (1970); H.Y. Akers & Sons, Inc. v. St. Louis Fire & Marine Insurance Company, 120 Ga. App. 800, 172 S.E.2d 355 (1969).