Question

0)
23. 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 this case? Explain.​

Answer 1

Explanation:

No, the factory owner cannot claim compensation from the insurance company since he has hidden the fact of statutory warning from the electricity board. He has violated the priciple of 'utmost good faith'. According to this principle, the insured must voluntarily make full, accurate disclosure of all facts, material to the risk being proposed. The insurer must also make clear all the terms and conditions in the insurance contract.