01 / The meaning
What it means.
For Australian contracts governed by the Insurance Contracts Act, the principle concerns both insurer and insured; it is not merely a rule requiring customers to answer questions. It is also distinct from specific disclosure or misrepresentation duties. Accurate information, reasonable cooperation and fair consideration of a claim can be relevant, but a disagreement about coverage does not automatically prove a breach of good faith.
The principle does not replace the written policy or guarantee that a disputed loss must be paid. If conduct is questioned, identify what happened, when it happened and why it may be unfair, rather than relying only on the phrase. Keep a clear chronology of requests, responses and decisions. Raise concerns through the insurer’s complaints process and obtain appropriate advice where the dispute involves legal rights or significant consequences.
02 / Put it in context
A practical example.
Hypothetical example: a business receives repeated unexplained requests for documents it has already supplied. It provides a dated record, asks the insurer to explain the outstanding issues and raises a formal complaint if the concerns remain unresolved.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Separate a disagreement about policy interpretation from concerns about how parties acted.
- Keep dated evidence of information supplied, requests made and reasons given.
- Identify the applicable complaints process and obtain advice on significant legal issues.
04 / Start a useful conversation
A question for your broker.
What specific conduct concerns us, and what evidence helps distinguish an ordinary coverage dispute from a good-faith issue?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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