Insurance

Whether and when discrepancies in statements by an insured to his insurer constitute a breach of the liability insurance cooperation clause' is the subject of this article. A distinction is drawn at the outset, between wilful, intentional or fraudulent material variances, here discussed, and those variances which are unintentional, accidental, unimportant or inconsequential. The latter categories are considered not sufficient to constitute a breach of the clause under discussion. As a practical matter, the question is fundamentally one of reconciling rights, that is to say: When the question arises as to whether or not an insured has breached the cooperation clause, sufficient to relieve the insurer of liability, courts are confronted with the problem of balancing the injured third party's interest in recovery and collection as opposed to the insurance carrier's interest in compliance and enforcement of the cooperation clause. The primary obstacle inherent in the resolution of these opposing interests has been expressed in the following manner: The clause cannot be interpreted in a way that...