- It means that every party to the contract must disclose all material facts relating to the subject matter of the insurance
- A positive duty voluntarily to disclose, accurately and fully
- All facts material to the risk being proposed
- The principal applies equally to both the proposer and the insurer throughout the contract
- If utmost good faith is NOT observed by either party, the contract may be avoided by other
Breaches of the duty of utmost good faith can be categorised as
- Non- disclosure
- Concealment of a material fact
- Fraudulent misrepresentation or statement made with the intention of deceiving the insurer
- Innocent misrepresentation or inaccurate statements which are believed to be true
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