A contract is voidable if one party has the option of treating it as void. If he elects to treat it is as binding, then both parties will be bound. Insurance contracts secured by the insured’s misrepresentation or non-dis closure are voidable at the insurer’s option.
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A contract which may be voided at the option of either party. For example, an insurer may avoid a policy from inception for the misrepresentation or non-disclosure of material facts during the negotiation of the placement, renewal or alteration of cover. A insurer may also avoid a policy from the date of the presentation of a fraudulent claim.
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US, MEDICAL: Insurance agreement that is no longer valid because it was canceled by one or more parties (insured or insurance company).
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(i) A contract which one party can choose not to enforce. (ii) contract of Insurance or Reinsurance in respect of which the underwriter has the right to repudiate liability on the grounds of a breach of good faith by the insured or Reinsured, or in the case of a voyage Policy, where the voyage has not commenced within a reasonable time after the risk was written.