Explain Why It Is Important for an Insured to Disclose

question 40

Essay

Explain why it is important for an insured to disclose all material facts.

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Definitions:

Working Capital

The difference between a company’s current assets and current liabilities, indicating its short-term financial health and operational efficiency.

Current Year

The ongoing year or the present calendar year in which transactions or activities are being accounted for.

Preceding Year

The year immediately before the current year.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, calculated as cost of goods sold divided by the average inventory.