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Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated?
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Madhav took a fire insurance policy of Rs. 20 lakh for his factory at ...
Principle: Principle of Utmost Good Faith
Explanation:
The principle of Utmost Good Faith is the foundation of any insurance contract. It expects the insured to disclose all the material facts related to the subject matter of the insurance policy. The insurer relies on the information provided by the insured to assess the risk involved in insuring the subject matter. If the insured fails to disclose any material fact, it can lead to an imbalance of risk and result in the insurer suffering losses.
In the given case, Madhav did not disclose the fact that highly explosive chemicals are being manufactured in his factory to avoid paying a premium more than Rs.24000. By doing so, Madhav violated the principle of Utmost Good Faith. The insurance company relied on the information provided by Madhav and charged a premium based on the risk involved in insuring his factory. If the insurance company had known about the highly explosive chemicals, they would have charged a higher premium or might have refused to insure the factory.
Due to the fire, Madhav's factory got severely damaged and he claimed Rs.20 lakh under the fire insurance policy. However, when the insurance company became aware of the highly explosive chemicals, they refused to make the payment for the claim. As per the principle of Utmost Good Faith, Madhav was obligated to disclose all the material facts related to his factory. Since he failed to do so, he is not entitled to receive the claim.
Conclusion:
The principle of Utmost Good Faith is the cornerstone of any insurance contract. It requires the insured to provide all the material facts related to the subject matter of the insurance policy. The insurer relies on this information to assess the risk involved in insuring the subject matter. If the insured fails to disclose any material fact, it can lead to an imbalance of risk and result in the insurer suffering losses. In the given case, Madhav violated the principle of Utmost Good Faith by not disclosing the fact that highly explosive chemicals are being manufactured in his factory. Therefore, he is not entitled to receive the claim.
Explanation:
The principle of Utmost Good Faith is the foundation of any insurance contract. It expects the insured to disclose all the material facts related to the subject matter of the insurance policy. The insurer relies on the information provided by the insured to assess the risk involved in insuring the subject matter. If the insured fails to disclose any material fact, it can lead to an imbalance of risk and result in the insurer suffering losses.
In the given case, Madhav did not disclose the fact that highly explosive chemicals are being manufactured in his factory to avoid paying a premium more than Rs.24000. By doing so, Madhav violated the principle of Utmost Good Faith. The insurance company relied on the information provided by Madhav and charged a premium based on the risk involved in insuring his factory. If the insurance company had known about the highly explosive chemicals, they would have charged a higher premium or might have refused to insure the factory.
Due to the fire, Madhav's factory got severely damaged and he claimed Rs.20 lakh under the fire insurance policy. However, when the insurance company became aware of the highly explosive chemicals, they refused to make the payment for the claim. As per the principle of Utmost Good Faith, Madhav was obligated to disclose all the material facts related to his factory. Since he failed to do so, he is not entitled to receive the claim.
Conclusion:
The principle of Utmost Good Faith is the cornerstone of any insurance contract. It requires the insured to provide all the material facts related to the subject matter of the insurance policy. The insurer relies on this information to assess the risk involved in insuring the subject matter. If the insured fails to disclose any material fact, it can lead to an imbalance of risk and result in the insurer suffering losses. In the given case, Madhav violated the principle of Utmost Good Faith by not disclosing the fact that highly explosive chemicals are being manufactured in his factory. Therefore, he is not entitled to receive the claim.
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Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated?
Question Description
Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated?.
Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated?.
Solutions for Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? in English & in Hindi are available as part of our courses for Commerce.
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Here you can find the meaning of Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? defined & explained in the simplest way possible. Besides giving the explanation of
Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated?, a detailed solution for Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? has been provided alongside types of Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? theory, EduRev gives you an
ample number of questions to practice Madhav took a fire insurance policy of Rs. 20 lakh for his factory at the annual premium of Rs.24000.In order to avoid premium more than this amount, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make the payment for claim as it became aware about the highly explosive chemicals. Hence , Madhav is not entitled to receive the claim. Identify the Principle being violated? tests, examples and also practice Commerce tests.
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