The Insurer’s Pre-Contractual Information Duties in General Consumer Insurance
PART I: Overview and introduction
The insight that knowledge means power – often quoted in shortened form as scientia potentia est – is owed to FRANCIS BACON (1561–1626), who formulated it in one of his major philosophical works, the Novum Organum. Although anything but specifically geared towards the banalities of economic life, the considerations underlying this dictum are applicable, even today, to nearly every process which is, in one form or another, related to markets and the transactions being made in them. All of these individual transactions are ultimately dependent on information available to the parties and normally it is thus a matter of utilising information advantages over the other market participants. In the insurance sector, the importance of – in particular risk-related – information as the key factor for the conclusion or non-conclusion of the specific contract is obvious. On this account, there are grounds to believe that BACON’s observation is (also) transferable to the insurance business. Thus, if one has a look at the typical knowledge of the two parties of an insurance contract, one quickly notices that each of them, in fact, has a rather different state of knowledge: while the insurer has a clear advantage over the (prospective) insured as far as the peculiarities of the offered insurance product are concerned, the latter is regularly better informed about the specific circumstances of the risk for which she seeks cover.