A factory owner gets his stock of goods insured but he hide the fact that the electricity board has issued him statutory warning letter to get his factory. Wiring changed later on, the factory catches fire due to short-circuit which principle is violated in the case.
A factory owner gets his stock of goods insured but he hide the fact that the electricity board has issued him statutory warning letter to get his factory. Wiring changed later on, the factory catches fire due to short-circuit which principle is violated in the case.
Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by fire during a specified period upto the amount specified in the policy. Normally, the fire insurance policy is for a period of one year after which it is to be renewed from time to time A claim for loss by fire must satisfy the two following conditions:
(i) There must be actual loss; and
(ii) Fire must be accidental and non intentional
The contract of fire insurance is a contract of strict indemnity. The insured can, in the event of loss, recover the actual amount of loss from the insurer. This is subject to the maximum amount for which the subject matter is insured. The insurer is liable to compensate only when fire is the proximate cause of damage or loss
The factory catches fire due to violation of principle of utmost good faith. The factory owner hided the information that electricity board has issued statutory warning letter.
Insurance contracts also require that both parties act with the utmost good faith. This means that both parties must accurately and fully disclose all material information. This not only ensures fairness, but also helps insurance companies accurately price premiums for insurance applicants. Insurance policies can be declared null and void if an applicant made a misrepresentation of material fact that was relied on by the insurance company.
Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by fire during a specified period upto the amount specified in the policy. Normally, the fire insurance policy is for a period of one year after which it is to be renewed from time to time A claim for loss by fire must satisfy the two following conditions:
(i) There must be actual loss; and
(ii) Fire must be accidental and non intentional
The contract of fire insurance is a contract of strict indemnity. The insured can, in the event of loss, recover the actual amount of loss from the insurer. This is subject to the maximum amount for which the subject matter is insured. The insurer is liable to compensate only when fire is the proximate cause of damage or loss
The factory catches fire due to violation of principle of utmost good faith. The factory owner hided the information that electricity board has issued statutory warning letter.
Insurance contracts also require that both parties act with the utmost good faith. This means that both parties must accurately and fully disclose all material information. This not only ensures fairness, but also helps insurance companies accurately price premiums for insurance applicants. Insurance policies can be declared null and void if an applicant made a misrepresentation of material fact that was relied on by the insurance company.
