Errors And Omissions Clauses

Published: 01st October 2010
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Although the "reasonable care" clause referred to above may sometimes entide insurers to refuse to pay a claim where the insured has been reckless, insurers often accept that the acts of the insured should not detract from the rights of co-insureds or third parties. Thus a mortgagee protection clause is often included as part of the standard ARPI wording, which will provide as follows:

"The interest of a mortgagee in this insurance shall not be prejudiced by any act or neglect of the mortgagor or occupier of any Building hereby insured whereby the risk of Damage is increased without the authority or knowledge of the mortgagee, provided the mortgagee immediately on becoming aware thereof shall give notice to the Insurers and pay an additional premium if required."

This clause will only apply when the risk of damage is actually increased, and will therefore not apply to material non-disclosure or misrepresentation prior to the conclusion of the contract. The increased risk of damage does not apply to the interest of a third party, in this case a mortgagee, but rather to the subject matter of the ARPI insurance.

This clause can also be applied to the insured himself for acts which take place without his knowledge, when it is known as a "non-invalidation" clause. An example is:

"The insurance in respect of Buildings or parts of Buildings not occupied by the Insured shall not be invalidated by any act or omission or by any alteration whereby the risk of Damage is increased, unknown to or beyond the control of the Insured provided that immediately they become aware thereof they shall give notice to the Insurers and pay an additional premium if required."

Willis J. Watson is a freelance writer since 2006, living in United States and he writes about he enjoys the most...insurance policies. If you want to read more informations about Landlord Insurance Quote and also read more reviews about Commercial Insurance Quotes, you can check out his websites.

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