Flashcards Studio

A start-up software company applies for a comprehensive cyber liability policy with Insurer Co. It fails to disclose that within the last six months its systems were audited and flagged with a critical vulnerability (zero-day) that management knew about but had not fixed. The policy is issued and premiums are paid. After a ransomware incident, Insurer denies the claim on the ground of concealment.   (a)State the controlling doctrine of concealment under the Insurance Code (PD 612, as amended by RA 10607) and list its essential elements. (b)Apply those elements to the facts: was there concealment? was the concealed fact material to the risk or pricing? was there intent to defraud? (c)What is the permissible remedy for the insurer (e.g., rescission ab initio vs denial of the claim).