If incorrect pre-contractual information is provided by an agent, what action can the insurer take?

In the context of insurance law, if an agent provides incorrect pre-contractual information that leads to the formation of a policy, the insurer has the right to avoid the policy. This means the insurer can declare it void due to the misrepresentation or non-disclosure of significant facts that would affect the decision to issue the policy.

Additionally, the reason for option D being correct lies in the legal principle that allows the insured, who may have relied on the agent’s incorrect information, to pursue legal action against the agent for any losses incurred as a result. This establishes a direct link whereby the insured can seek recourse against the agent due to the misrepresentation made during the pre-contractual phase, thereby holding the agent responsible for their actions.

This reflects the broader principle of agency in insurance, where agents act on behalf of the insurer but also owe a duty of care to the insured to provide accurate and truthful representations. Thus, option D encapsulates both the insurer's ability to avoid the policy due to misrepresentation and the insured's right to seek compensation from the agent for reliance on that incorrect information.