Primary Obligations of an Insured
What are the reponsibilities of the Insured Party?
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What are the primary obligations of the insured?
The primary duties of an insured in an insurance contract are as follows:
Duty to Disclose Information - The insured must inform the insurer of any events relevant to the contingent risk transferred to the insurer. This includes disclosing information in the application for policy coverage and disclosing incidences of damage to the insured person or property or harms resulting from the insureds conduct. A failure to disclose such information may lead to the loss of insurance coverage.
Duty to Cooperate - An insured has a duty to cooperate with the insurer in the identification, investigation, and resolution of any event or circumstance giving rise to losses born by the insurer.
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Discussion: What do you think about the insureds duties? Why do you think they are necessary?
Practice Question: ABC Corp has a policy with 123 Insurance covering any damage to ABCs facilities or equipment. ABC suffers a huge loss when a fire engulfs the facility. What would ABCs obligations as an insured be in this situation?