Doctrine of Utmost Good Faith

With lots of doctrine that our fellow lawyers have to know, and remember, we as the Business Law student should know it as well. In fact, the whole nation should be aware of this as this Doctrines are the one that is guiding us and helping us especially for human rights.

In insurance law, from the previous post, Doctrine of Utmost Good Faith is one of the most important element, not in other contracts, but solely on Insurance Contract. With the definition that, each party to a proposed contract is under a duty to disclose to the other all information which would influence his decision to enter into the contract, whether such information is requested or not.

AS simple as it is defines, it means a lot to make sure each and every word counts. In fact, good faith can be termed as genuine faith, and things that is genuine that is informed is to ensure trust from both parties. This is very important as the failure to fulfil or giving material information, will subject the other party to avoid the contract. As insurance contract are based on mutual trust, and with information definitely more well understood by each party, it is their job and responsibility to enlighten each other regarding it. The mutual trust and confidence bonding between the insured and the insurer can be termed as uberrimae fidei, the same meaning as utmost good faith.

A very important case of this can be adapted from the example of someone who had heart and lungs problem. However, though not disclosed in his life insurance, nothing happened until SARS strike through one day. The impact was heavy (as it is an acute pneumonia) causes the guy passed away due to it. And from the thorough inspection from the doctor with the report being given to the company, the company chose not to pay or compensate to the family because it is stated that the deceased did not notify that.

Thus, in this Doctrine, telling the right and actual information is very important. It is not like life that sometimes we can make assumptions, no, not a chance. And with that, do beware and keep your insurance agent knows everything bout you well.