- 5 Marks
Question
- Abokhasomi was told that he had kidney problems and lung infection, neither of which he disclosed to the insurer in the proposal form for a health policy. Abokhasomi filled out the proposal form, stating that no health issues were present. The policy was issued after paying the premium. Three months later, he became sick, and a test revealed a lung infection. He now wants the insurer to pay for the treatment, which the insurer has declined on the grounds of non-disclosure.
Required:
State the applicable law and advise the parties. (5 Marks)
Answer
The applicable law in this situation is the duty of utmost good faith (uberrimae fidei) in insurance contracts. Under this principle, both parties must disclose all material facts that could influence the decision of the insurer to accept the risk. Abokhasomi’s failure to disclose his pre-existing health conditions constitutes a breach of this duty, giving the insurer the right to void the contract or refuse the claim. Therefore, the insurer is justified in declining to cover the treatment on the grounds of non-disclosure.
- Tags: Breach of Contract, Contract of Insurance, Insurance Law, Non-Disclosure
- Level: Level 1
- Topic: Law of Contract
- Series: NOV 2023
- Uploader: Theophilus