What is the meaning of waiver in an insurance contract?

In the context of an insurance contract, a waiver refers to the intentional relinquishment of a known right, often involving a party deciding not to enforce certain terms or conditions of the contract. This could occur when an insurer, for instance, chooses not to enforce a particular exclusion in a policy despite being aware of it.

This relinquishment signifies that the party recognizes the right they hold but has consciously decided to forgo it either for a specific transaction, to facilitate a relationship, or to expedite a claim process. The essence of a waiver is that it must be deliberate, and the party giving up the right must be knowledgeable about what they are giving up.

The other options do not accurately capture the concept of a waiver. Canceling an agreement is not the same as a waiver because it involves ending the terms of the contract entirely rather than voluntarily choosing not to enforce a right within it. A common practice in underwriting does not define a waiver, as underwriting relates to the assessment and acceptance of risk rather than the relinquishment of rights. Enforcing a contract under duress refers to situations wherein a party is compelled to act against their will, which is contrary to the nature of a waiver that implies a voluntary decision to forgo a right.