Statutory Intervention on the Duty of Disclosure in Insurance Contracts in Botswana

Abstract

One of the most contentious issues in insurance law is the duty of disclosure in
insurance contracts. An insurance contract is dubbed as a contract “uberrima
fi dei,” meaning that it is a contract which must be entered into in utmost good
faith. The duty of disclosure under common law has been described as broad
and as inequitable and as heavily in favour of the insurers at the expense of
the insureds. This paper seeks to examine the extent to which the Botswana
legislature has intervened on the common law relating to disclosure in
insurance contracts. This paper recommends statutory intervention on the duty
of disclosure. This should focus on the nature and scope of the insured’s duty
of disclosure; the test of materiality; and statutory remedies where the duty has
been violated. Furthermore, it should be mandatory for the insurer to advise the
policyholder of the duty to disclose facts that are material to the risk insured.
These changes would go a long way in mitigating the harsh effects of common
law position on non-disclosure on the part of the insured.