A Comparative Analysis of the Insurer’s Pre-Contractual Duty of Utmost Good Faith

This article comparatively analyses insurer’s pre-contractual duty of utmost good faith in English law and in some other common law jurisdictions (Australia, New Zealand, and the United States) and civil law jurisdictions (China and Germany). At common law, the insurer has a pre-contractual duty to disclose facts known to it which are material to: the nature of the risk sought to be covered, or the recoverability of a claim under the policy, but the sole remedy of avoidance for the insurer’s breach of the duty was useless to the insured following a loss. The Insurance Act 2015 abolished the remedy of avoidance without introducing new remedies. These other jurisdictions have enacted legislation to enhance the scope of an insurer’s duty of disclosure and provide specific remedies for the breach. The legislation varies in the different jurisdictions and would be instrumental for the future development of English law in relation to the insurer’s pre-contractual duty and remedies for the breach. Some suggestions are put forward for the reform of the English law in the future.