Breach Of Contract
What Does Breach Of Contract Mean?
A breach of contract occurs when one party violates the terms of a contract by failing to fulfill their obligations without a legitimate legal excuse. This typically leads to a civil lawsuit, which may result in compensation awarded to the aggrieved party. In the context of insurance, a breach of contract refers to the failure to meet the contractual obligations binding the insured and the insurer.
Insuranceopedia Explains Breach Of Contract
Once an insurer commits to providing an insurance policy, it is legally obligated to offer support and assistance to the insured if an insured risk occurs. Conversely, the insured is legally required to make timely payments as outlined in the insurance policy. If either party fails to fulfill the terms of the insurance policy, a breach of contract occurs. For example, if the insurance company denies a valid claim made by the insured or pays only a fraction of a legitimate claim, the insurer is considered to have breached the contract.
