CMFAS BCP Insurance Documents question: compliance with a warranty

CMFAS BCPInsurance Documents

Which statement about compliance with a warranty is correct?

A It need only be substantially complied with, as long as the risk is unchanged
B It must be strictly complied with, whether or not it is material to the risk
C It applies only if the insurer can prove the breach caused the loss
D It is treated like a representation, so it must be material to count

Show the answer and explanation

Answer: B. It must be strictly complied with, whether or not it is material to the risk

A warranty must be strictly and literally complied with, regardless of whether it is material or whether a loss actually resulted from the breach. This strictness is what distinguishes a warranty from a representation.

Common mistake

Warranties demand strict, literal compliance — materiality of the breach is irrelevant.

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CMFAS BCP Insurance Documents question: compliance with a warranty

Answer: B. It must be strictly complied with, whether or not it is material to the risk

Common mistake

Related CMFAS BCP questions

CMFAS BCP Insurance Documents question: compliance with a warranty

Answer: B. It must be strictly complied with, whether or not it is material to the risk

Common mistake

Related CMFAS BCP questions