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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
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Correct Answer: Option A
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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