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 ininsurance contracts. An insurance contract is dubbed as a contract “uberrimafi dei,” meaning that it is a contract which must be entered into in utmost goodfaith. The duty of disclosure under common law has been described as broadand as inequitable and as heavily in favour of the insurers at the expense ofthe insureds. This paper seeks to examine the extent to which the Botswanalegislature has intervened on the common law relating to disclosure ininsurance contracts. This paper recommends statutory intervention on the dutyof disclosure. This should focus on the nature and scope of the insured’s dutyof disclosure; the test of materiality; and statutory remedies where the duty hasbeen violated. Furthermore, it should be mandatory for the insurer to advise thepolicyholder 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 commonlaw position on non-disclosure on the part of the insured.