Obligation to provide guidance and advice in insurance contracts and the limits of insurer liability in advisory negligence
Subject Areas : حقوق مدنیMohammad Mahdi Meraati 1 , Ahmad Pour Ebrahim 2
1 - Master’s Degree in Private Law, Department of Law, Faculty of Literature and Humanities, University of Guilan, Rasht, Iran.
2 - Assistant Professor of Criminal Law and Criminology, Department of Law, Faculty of Humanities, Rasht Branch, Islamic Azad University, Rasht, Iran.
Keywords: Insurance contract, duty to provide insurance advice, good faith, civil liability of the insurer, advisory negligence, insured.,
Abstract :
The insurance contract, as one of the most complex forms of private contracts, has persistently given rise to legal disputes due to the inherent information asymmetry between the insurer and the insured. The central issue of this study is to elucidate the nature and scope of the insurer’s obligation to provide insurance-related guidance and advice, and to examine the limits of the insurer’s legal liability in cases of advisory fault or negligence. Adopting a descriptive–analytical approach and relying on library-based sources, statutory provisions, judicial precedents, and legal doctrines, this paper seeks to address the question of whether the insurer’s obligation is merely confined to the issuance of an insurance policy in accordance with the insured’s request, or whether the insurer is also subject to an independent obligation to provide clear, accurate, and appropriate advice tailored to the insured’s specific circumstances. The findings indicate that the insured commonly enters into the insurance contract without possessing specialized knowledge and primarily relies on the explanations and representations of the insurer or its agent. A substantial proportion of insurance disputes arises from a lack of transparency in clarifying the scope of coverage, exclusions, and policy terms and conditions. The study concludes that the duty to provide insurance advice constitutes an implied obligation rooted in the principles of good faith and contractual transparency. Consequently, where incomplete or misleading advice is rendered, the insurer may, depending on the circumstances, incur liability for compensation of the resulting damages, and such liability is not necessarily confined to the express terms of the insurance contract.
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