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Direction: Read the following text and answer the questions that follow:
Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.
Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.
  • a)
    Utmost good faith
  • b)
    Insurable interest
  • c)
    Proximate cause
  • d)
    None of the above
Correct answer is option 'A'. Can you explain this answer?
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Direction: Read the following text and answer the questions that foll...
The doctrine of utmost good faith is a principle used in insurance contracts, legally obliging all parties to act honestly and not mislead or withhold critical information from one another. Violations of the doctrine of good faith can result in contracts being voided and sometimes even legal action.
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Direction: Read the following text and answer the questions that foll...
Principle of Utmost Good Faith
In insurance contracts, the principle of utmost good faith (uberrimae fidei) mandates that both parties must act honestly and disclose all relevant facts. Mr. Vijay Arora's failure to inform the insurance company about the prior notice from the electricity department regarding faulty wiring is a clear violation of this principle.
Key Violations of Utmost Good Faith
- Non-Disclosure of Relevant Information: Mr. Vijay was aware of the electrical issues that could potentially lead to a fire. By not disclosing this information, he breached the trust required in the insurance contract.
- Impact on the Insurer's Decision: Had the insurance company known about the faulty wiring, they might have reassessed the risk associated with insuring the factory or might have required repairs before issuing the policy.
- Consequences of Breach: When the factory caught fire due to the undisclosed faulty wiring, the insurer could deny the claim, as the principle of utmost good faith was not upheld.
Conclusion
In conclusion, the failure to report known risks undermines the foundation of the insurance agreement, which relies on transparency and trust. The principle of utmost good faith ensures that both parties have a fair understanding of the risks involved, thereby safeguarding the interests of both the insurer and the insured. Mr. Vijay's actions directly contravened this principle, leading to potential financial and legal repercussions.
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Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“Mr. Vijay took a fire insurance policy for this factory from Zokhim Free Insurance Pvt. Ltd....”.Q. Which principle of insurance is relevant here?

Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.“He didn’t get the wiring done ...”.Q. Name the related principle not followed by Mr. Vijay Arora in the above-stated lines.

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Direction: Read the following text and answer the below questions :Radio XYZ is a company which has improved its functioning by proper management. The company has been good in deciding and completing targets. In the previous meeting, it was decided that in coming years, company could show increase in the number of workers, number of products produced and also the sales turnover. However, recently it earned a negative reputation under the impact of resignations put forth by two of its departmental heads. These departmental heads were experts in their fields. One was leading the marketing department and the other was a scientist of repute who headed the manufacturing department. In the top-level management meeting it was found that such departmental heads who were specialists in their areas cannot be tackled by unity of command. They were egoistic as they were specialists.After the meeting, things started to change for the organisation as all the departments started to work with one single target of giving back the company its lost fame. There was a combined effort which doubled the revenue of the organisation. A special regulation system of including every level manager was brought into action. Thus, the overall functioning of the organization improved.Identify the feature of management highlighted above

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Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
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Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Direction: Read the following text and answer the questions that follow:Mr. Shailesh owns an oil factory in Rajasthan. Due to illness of his parents living in the UK, he had to go to UK. There he joined a job. He asked his friend Mr. Vijay Arora to take charge of his company till he returns to India. Mr. Vijay took a fire insurance policy for this factory from Sokhim Free Insurance Pvt. Ltd. A month before he got the fire insurance policy, he received a notice from electricity department to get the wiring of the company repaired. He didn’t inform the insurance company about it. He didn’t get the wiring of the factory repaired. After five months of taking the policy, the factory caught fire due to faulty wiring.Q. “He didn’t inform the insurance company about it.” Identify the principle violated here.a)Utmost good faithb)Insurable interestc)Proximate caused)None of the aboveCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Commerce tests.
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