Does an Innocent Misrepresentation in an Application for General Insurance

question 36

Multiple Choice

Does an innocent misrepresentation in an application for general insurance entitle the insurer to refuse to pay a claim?

• A)No,but they can reduce their liability to nil if they can show that would not have entered into the contract if the misrepresentation had not been made.
• B)Yes,the insurer can refuse,but only if the insurer is in a different position than they would have been had the misrepresentation not been made.
• C)Yes,the insurer is entitled to avoid the contract entirely.
• D)No,the insurer cannot refuse to pay the claim.

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Definitions:

Activity-Based Costing

Activity-based costing is an accounting method that identifies and assigns costs to specific activities, facilitating more precise economic analysis of various business processes.

Activity Rates

Rates used in activity-based costing to assign costs to products or services based on the amount of an activity they consume.

Activity-Based Costing

A method of costing that identifies individual activities as the fundamental cost objects and uses the costs of these activities to compute the costs of various products or services.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, often used as a basis for allocating overhead costs.