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27 CLAIMS CO-OPERATION AND GOOD FAITH

Law of Insurance Contracts

Chapter 27 CLAIMS CO-OPERATION AND GOOD FAITH 27-1 THE CONTINUING DUTY OF GOOD FAITH 27-1A The Nature of the Duty In England, it “is an essential condition of the policy of insurance that the underwriters shall be treated with good faith, not merely in reference to the inception of the risk, but in the steps taken to carry out the contract”. 1 Nearly a century later, in The Star Sea , 2 Lord Hobhouse confirmed that “utmost good faith is a principle of fair dealing which does not come to an end when the contract has been made”. 3 The Star Sea was a case of marine insurance but, as Lord Hobhouse observed, it was common ground that the principle of utmost good faith in issue in the case “is not confined to marine insurance; it is applicable to all forms of insurance”. 4

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