Basis of contract

Insurance contracts are built on what the applicant declares. The insurer prices and accepts the risk on the strength of those answers rather than by independently investigating each one.

That is why an inaccurate answer is not a technicality: it undermines the basis on which the contract was made.

Related terms

• Proposal form The application document. Its answers form the basis of the contract.
• Material non-disclosure Failing to reveal something that would have affected the insurer's decision.
• Utmost good faith The duty on both sides to disclose everything material, honestly.

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