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in Business Studies by (92.4k points)

A factory owner gets his stock of goods insured, but he hides the fact that the electricity board has issued him a statutory warning letter to get his factory’s wiring changed. Later on, the factory catches fire due to short circuit of wring. Can he claim compensation?

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No, he cannot claim the compensation, as he has violated the principle of utmost good faith. He should have disclosed all the material facts to the insurance company.

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