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The Principle of Utmost Good Faith

May 12, 2008

Utmost Good Faith means that each party to a proposed insurance contract is legally obliged  to reveal to the other all information and materials facts, which would influence the other’s decision to enter into the contract, whether such information is requested or not.

Concealment and Misrepresentation.

Concealment is the intentional failure to reveal a material fact, which would influence a prudent underwriter in deciding whether to accept or reject a risk and what rate to charge and what conditions to impose.

Misrepresentation is the giving of false or misleading information on the material fact.

Concealment and/or misrepresentation gives the aggrieved party the right to avoid the contract.


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