Do your clients understand what they are signing when they make a declaration on a proposal form? Proposal forms often contain basis-of-contract clauses, and accuracy in completing the proposal is as important as it has ever been. This article explains why.
In February 2013, Mills & Reeve reported on the first-instance decision in Genesis Housing v Liberty. Liberty was discharged from liability under a policy providing cover against building contractors’ insolvency because the claimant insured (Genesis), the employer, made an error on the proposal form. It stated that the contractor was ‘Time and Tide Construction Ltd’ instead of ‘Time and Tide (Bedford) Ltd’. The proposal form contained a basis clause and so the warranty that the information in the proposal form was ‘correct and complete in every detail and [the claimant had] not withheld any material fact’ had been breached.
Genesis appealed to the Court of Appeal, which handed down its decision last Friday, upholding the earlier decision…
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