An Insured Has Noted on Its Insurance Application That Its

question 21

Multiple Choice

An insured has noted on its insurance application that its restaurant has a wood fireplace,but it has omitted to comment that occasionally escaping of sparks can cause a fire risk.In this instance,why would the insured be considered as having complied with its duty to disclose?

• A) Insured has to be in a position to fully assess the risk.
• B) Insurer has been candid and forthcoming.
• C) Insurer is expected to be worldly wise.
• D) Insured has to show personal judgement.

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Definitions:

Preferential Payment

A payment made by an insolvent debtor that gives preferential treatment to one creditor over another.

Voluntary Petition

A legal document filed by an individual or entity declaring their intent to undergo bankruptcy proceedings under their own accord.

Bankruptcy Relief

Legal measures available to individuals or corporations that cannot meet their financial obligations, allowing for reorganization or discharge of debts.

Preferential Payment

A financial transaction that gives prior payment to one creditor over others before a debtor's bankruptcy.