Duty of Utmost Good Faith

What is Duty of Utmost Good Faith?

Duty of Utmost Good Faith is Each party to the insurance contract – the policyholder, the insurer and a third party beneficiary (a person who is entitled to the benefits of the insurance policy) – must act with fairness and honesty in their dealings with one another. An example of this would be insured policyholder’s obligation to make full disclosure of all relevant facts when taking out the insurance in line with their duty of disclosure. An example for an insurer would be to respond to a claim made under a policy in a timely fashion.

 

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