Warranties

Question 1

What are Warranties?

Answer 1

A strict contractual term by which the insured undertakes or warrants or guarantees that certain representations made by him or her to the insurer are accurate (aka- affirmative warranty) or that certain duties are performed. ( aka- promissory warranty)

Question 2

Types of warranties (Affirmative warranties)

Answer 2

Affirmative warranties and Promissory warranties.

Affirmative warranties are based on pre-contractual representations made by the insured (e.g) when the insured answers questions posed by the insurer in the proposal form.

The proposal form requires the insurer to warrant the truth of their answer.
The questions and answers in the proposal form are included/ incorporated in the insurance contract.

In terms of affirmative warranty, the insured warrants the truth of representations regarding the past and the present.

This means these types of warranties thus relate to the past or present situation, and the continued correctness of the representation is not required.

Question 3

Types of warranties (Promissory warranties)

Answer 3

Promissory warranties

Promissory warranties may also rise from a pre-contractual proposal form but are frequently included directly as terms in the policy.

The insured warrants the performance of a certain act or that a given state of affairs will exist in the future.