Warranty

Warranty It is a clause which the policyholder must term in an insurance contract which must be exactly and literally complied with. Examples of warranty; Alarm system warranty when buying a policy for burglary. If you have an insurance policy providing coverage for burglary or theft of your business contents and you are robbed while the alarm system is off-line, the alarm system warranty will not cover the loss. Sub-contractor warranty, If this warranty is contained in your policy, it is your requirement that you must receive written proof of insurance from any subcontractor that you hire prior before they commence work for you. You could be held responsible for the negligent acts of subcontractors. An insurer (the underwriter) has the right to limit their risk by placing warranties on their policies therefore, if the warranty is breached the policy is void. Failure to comply to your warranty could VOID your coverage regardless of the cause of the loss and the coverages and exclusions in your policy. A warranty can be in express term: The policy may expressly classify certain terms as being conditions precedent to an insurer’s risk or to an insurer’s liability for a claim. For example, a clause stating that a claim under the policy will not be payable unless a particular condition has been compliedwith. Also, a warranty can be Implied into a policy where,for example, compliance with the term goes to the root of the insurance contract. In some jurisdictions if the warranty is a risk mitigation term (rather than a term which defines the risk as a whole) and, if the policyholder can show that the breach could not have increased the risk of the loss that occurred in the circumstances in which it occurred then, the insurer will not be able to rely on the breach of warranty to escape liability. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful