Sarah has taken out a household insurance policy. Her implied duty under the policy means:

• A. a duty of care is imposed by common law and will not be found in the policy conditions
• B. her duty under the policy is binding on the insurer
• C. her duty is not binding and all claims made are valid
• D. all her duties are set out specifically in the policy conditions

Answer: (A)

The main idea is that some obligations in an insurance contract come from law, not from what the policy specifically says. In a household policy, the insured has an implied duty of care and duty of utmost good faith that arise from common law (and related statutes in some places). These duties exist regardless of whether they’re written into the policy conditions, so they aren’t found in the policy text itself. That’s why the statement that the duty is imposed by common law and will not be found in the policy conditions is the correct interpretation.

This doesn’t mean the insurer bears the same implied duties, nor does it mean every claim is automatically valid. Nor does it mean all duties are spelled out in the policy—there are implied duties above and beyond the express terms.