The Marine Insurer's Obligation To Explain The Exclusion Clause Under The Principle Of Utmost Good Faith

The utmost good faith, a basic principle in marine insurance, has binding forceover both parities of the contract. However, scholars and experts only put greatemphasis on the insured's duty of disclosure and warranty, while ignore the insurer'sduty of utmost good faith while making the contract. Most marine insurance contractsare made up of standard terms, so the insurer often has far better understanding in thecontract terms, especially the complicated exclusion clause, than the policy-holderand the insured. Moreover, the exclusion clause is always closely related to theinsured's right to claim for compensation. Because of the special character of marineinsurance contract, the unbalance between the insurer and the policy-holder withregard to the professional knowledge and the close connection between exclusionclause and the insured's right, to establish a systematic frame of marine insurer'sobligation to explain the exclusion terms will be of great significance.Applying the means of historical and theoretical analysis, the first part of thearticle mainly discusses the meaning, character and legal basis of marine insurer'sexplanatory obligation. According to the analysis, the principle of utmost good faithand the principle of equality and free will in contract law are the most importantfoundation of the marine insurer's explanatory obligation. And this obligation is apre-contractual legal obligation.By means of comparative analysis and case study, the following chapters discussthe performance of the obligation and the legal consequence after violating theobligation. By studying different attitudes of the scholars home and abroad as well assome relevant cases, the article attempts to build a complete frame of the explanatoryobligation.Based on the discussion in the previous chapters, the author presents somesuggestions with regard to the marine insurance legislation and the insurer's practicein the last part of the article and hopes that they may serve as reference for theinsurance legislation and practice.