The term utmost good faith in insurance means?
COMMERCE
WAEC 2015
The term utmost good faith in insurance means?
- A. both the insured and insurer must disclose all information
- B. only the insurer must disclose all information
- C. the beneficiary must disclose all information
- D. only the insured must disclose all information
Correct Answer: A. both the insured and insurer must disclose all information
Explanation
Utmost good faith is a common law principle (sometimes called Uberrimae Fidei). The principle means that every person who enters into a contract of insurance has a legal obligation to act with utmost good faith towards the company offering theinsurance. It requires transacting parties to act honestly and not mislead or withhold critical information from one another.
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