Which of the following constitute Breach of Utmost Good faith?

A. Non-Disclosure

B. Misrepresentation

C. Both A & B

D. None of the above

Answer: Option C

Solution(By Examveda Team)

Misrepresentation and non-disclosure constitute breach of utmost good faith. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy. Non-disclosure means failure to divulge a relevant fact when applying for an insurance policy. This is a violation of the principle of good faith which should be observed in insurance negotiations.