Insurance Law- Principle of Non-Concealment

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INTRODUCTION One of the fundamental features of an insurance contract is that it is one of Uberrimae – Fidei, Utmost Good Faith. This is the basis of all insurance transactions and this doctrine distinguishes it from other type of contract. This duty is of three fold as held in Ado v. Nigerian General Insurance ltd. (1980): 1.To disclose all Material Fact. 2. Not to misrepresent Material Fact. 3. Not to make fraudulent claims. The insured must therefore volunteer and disclose all material facts relating to the subject matter of the insurance within his actual or presumed knowledge at the time of making the contract. This is known as the duty of DISCLOSURE OR NON- CONCEALMENT. ORIGIN OF THE DUTY OF NON CONCEALMENT Under the general law of contract, a contracting party is not obliged to furnish information which is not asked for, even when the information is material to the transaction. The applicable maxim is Caveat Emptor meaning “let the buyer beware”. Thus the purchase of an article or service has the duty of making all necessary enquiries from the seller. An exception to this rule applies in insurance transaction. A duty to disclose material facts relating to insurance transaction is imposed by law having regards to the nature of insurance as a device for treatment of risk. This rule originated from the ancient English case of Carter v. Boehm, where Lord Mansfield C.J succinctly stated the legal position thus; “insurance is a contract upon speculation. The special facts on which the contingency is computed, lie more commonly in the knowledge of the insured only. The keeping back of such circumstances is a fraud... Although the suppression should happen through mistake, without any fraudulent intention, yet still, the underwriter is
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