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Ex-gratia payment

A claims payment made by the insurer ‘as of favour’ even though there is no legal obligation to pay. Such payments are made to preserve goodwill or where the right to refuse payment is founded only on a technicality.
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Latin for “from favour.” A payment by an insurer to an insured for which there is no liability under the contract. In some cases an insurer may feel that there has been a mistake or a misunderstanding, and he may pay a claim even though he does not appear to be liable. See Also: “Claims types of Ex-gratia Payment.”

Ex-turpi causa non oritur actio

‘An action does not arise from a base cause. The rule prevents a criminal from recovering under a liability policy for injury or damage that otherwise would be within the policy. However, in Hardy v. Motor Insurers Bureau (1964), the claimant, through a right conferred by the Road Traffic Act, had a direct right of action against the insurer. Recoveries can also be made for mere acts of negligence even though criminal.

Ex-works

A shipment term. When goods are shipped ex-works it is the duty of the seller to place the goods at the disposal of the buyer at the time and place specified in the contract (usually the premises of the seller) and to bear all costs involved in doing so.

Examination under oath

Found in the conditions section of many insurance policies, the insurer’s right to examine an insured under oath following a loss. It is taken from an insured under oath and in the presence of a court reporter. The carrier asks questions pertinent to the claim involved, and the examination helps a carrier determine what happened in the loss and whether or not there is a claim that needs to be paid. Often referred to as EUO.
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A sworn statement in question and answer form usually taken before a notary and a certified shorthand reporter. It can be taken by any person appointed by the insurer but should be taken by an attorney experienced in first party property insurance matters (Third party liability policies do not have examination under oath provisions). It is taken for the purpose of allowing the insurer to cross-examine the proof of loss submitted by the insured. It is one of the most valuable tools an insurer has against fraud.

Examiner

Representative of a state department of insurance who performs official audits and investigates the compliance of insurance companies to regulations.