Policy conditions are simply provisions of an insurance policy which along with the insuring agreement and exclusions complete the contract. The conditions may be precedent to the contract, conditions subsequent to the contract and conditions precedent to liability . The conditions must be complied with to make the insurer liable under the contract . The conditions may or may not be incorporated in the policy. The conditions which are not mentioned in the policy are known as Implied conditions. The implied conditions are utmost good faith, insurable interest and indemnity. On the contrary, the conditions which are set out in the policy are known as Express Conditions which may be either of general nature and therefore , printed on the policy or conditions specially designed with reference to a particular contract and are incorporated in the policy.
The following are the express conditions printed on the Standard policy form.
(1) MISDESCRIPTION : (condition I) : As per this condition there should be no misdescription or mis representation or non disclosure of the material facts as regards the subject matter is concerned. Otherwise the policy be voidable at the option of the insurer. The condition stresses the proposer’s duty to reveal all material facts at the time of making proposal. What is material and what is not material will depend upon the circumstances of particular case. Generally a fact is said to be material if it affects the judgement of the insurer after its disclosure . Some questions raised in the proposal from such as information relating to past losses sustained on the property refusal for renewal or payment of claim by any other insurer or the involvement of the insured in a hazardous occupation etc. are considered as material.
This condition is in accordance with the principle of equity in as much as it protects the insurer if it is subsequently discovered that the insurance. has been obtained through an inaccurate statement on the part of the insured. This is obvious because the insurer in deciding whether a risk should be accepted and the rate of premium to be charged has regards to the facts disclosed by the proposer. Even if they misdescription affects a part only the whole and renders it untenable.
(2) PAYMENT OF PREMIUM CONDITION-2: No payment in respect of premium shall be deemed unless a printed form of receipt for the same has been given to the insured. The condition says about the proof of premium payments (a) Premium be paid, (b) Form of printed receipt be obtained, ( C ) it should be signed by an official or agent of the company, Unless premiums is paid in advance no risk is covered. (3) OTHER INSURANCES (CONDITION-3) (4) COLLAPSE OF BUILDING CONDITION-4: According to this condition the insurance cover is automatically cancelled in the event of collapse of the building or of any important part of the building if it goes to change the original risk. The fall or displacement may subject the building or its contents to an increased risk of fire. The insurance cover is not cancelled if they collapse is covered by fire . The responsibility to prove falls on the insured