Q730
Which of the following constitute Breach of Utmost Good faith?
A.
Non-Disclosure
B.
Misrepresentation
C.
Both A & B
AnswerD.
None of the above
Answer: Option C
Solution
Answer: Option C
Solution:
Misrepresentation and non-disclosure constitute breach of utmost good faith. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy. Non-disclosure means failure to divulge a relevant fact when applying for an insurance policy. This is a violation of the principle of good faith which should be observed in insurance negotiations.