Commercial Property Losses – The Lease and Insurance Coverage
After a property loss an adjuster may need a copy of the lease to determine who owes for what damage. Ordinarily landlords and tenants are responsible for repairing and insuring their own respective properties.
Problems can occur if one party assumed the risk for repairs to property not owned. As most leases are drafted by the property owner this could be the case for the tenant. Questions could also come up when improvements and betterments are damaged. Improvements and betterments are done to make the space functional for the tenant’s operation. A lease could state that improvements and betterments become the property of the landlord at the time of installation, at the end of the lease or sometime in between.
It is advisable to reconcile the lease requirements and the insurance coverage before a loss to avoid confusion after a loss.
Examination Under Oath -Policy Requirement
There is a section in many insurance policies, Duties In the Event of Loss, that policyholders must be prepared to comply with when they have a claim. It is there that the insured agrees to submit to an Examination Under Oath (EUO) if requested by the insurance company.
An EUO is a formal proceeding conducted by an attorney in the presence of a court reporter. Its purpose is to allow the insurance company to obtain information from its policyholder it considers necessary to evaluate a claim. An EUO can be conducted when the company has serious questions on the claim and/or the insurance application, the policyholder is vague or uncooperative or there are suspicions of fraud. The demand to take an EUO often is accompanied by a request for the policyholder to produce documents the company believes pertain to the loss. During an EUO an attorney can cover anything considered material to the loss such as the purchase of the policy, finances, criminal records or past claims history. A policyholder is allowed to have an attorney present, however the attorney cannot object to or ask any questions.
An Examination Under Oath is a contractual obligation for the insured. An insured’s failure to submit to an EUO or failure to answer any of the questions can be a material breach and a basis for a denial. Failure or refusal to comply with a documents request can also result in a denial. An insured cannot seek protection under the Fifth Amendment to avoid answering questions. A refusal to comply could bar a policyholder’s lawsuit against the insurance company.
Tagged with:
claims •
commercial property loss •
contractual obligation •
improvements and betterments •
policy requirement
Social Network | 
Commercial Property Losses and the Examination Under Oath Policy Requirement
Commercial Property Losses – The Lease and Insurance Coverage
After a property loss an adjuster may need a copy of the lease to determine who owes for what damage. Ordinarily landlords and tenants are responsible for repairing and insuring their own respective properties.
Problems can occur if one party assumed the risk for repairs to property not owned. As most leases are drafted by the property owner this could be the case for the tenant. Questions could also come up when improvements and betterments are damaged. Improvements and betterments are done to make the space functional for the tenant’s operation. A lease could state that improvements and betterments become the property of the landlord at the time of installation, at the end of the lease or sometime in between.
It is advisable to reconcile the lease requirements and the insurance coverage before a loss to avoid confusion after a loss.
Examination Under Oath -Policy Requirement
There is a section in many insurance policies, Duties In the Event of Loss, that policyholders must be prepared to comply with when they have a claim. It is there that the insured agrees to submit to an Examination Under Oath (EUO) if requested by the insurance company.
An EUO is a formal proceeding conducted by an attorney in the presence of a court reporter. Its purpose is to allow the insurance company to obtain information from its policyholder it considers necessary to evaluate a claim. An EUO can be conducted when the company has serious questions on the claim and/or the insurance application, the policyholder is vague or uncooperative or there are suspicions of fraud. The demand to take an EUO often is accompanied by a request for the policyholder to produce documents the company believes pertain to the loss. During an EUO an attorney can cover anything considered material to the loss such as the purchase of the policy, finances, criminal records or past claims history. A policyholder is allowed to have an attorney present, however the attorney cannot object to or ask any questions.
An Examination Under Oath is a contractual obligation for the insured. An insured’s failure to submit to an EUO or failure to answer any of the questions can be a material breach and a basis for a denial. Failure or refusal to comply with a documents request can also result in a denial. An insured cannot seek protection under the Fifth Amendment to avoid answering questions. A refusal to comply could bar a policyholder’s lawsuit against the insurance company.
Tagged with: claims • commercial property loss • contractual obligation • improvements and betterments • policy requirement