What is a potential outcome if an insurer fails to properly assess a proposal form?

If an insurer fails to properly assess a proposal form, the potential outcome is that the proposal might be deemed invalid. This is because a thorough assessment is crucial for determining the risk presented by the applicant and for ensuring that the information provided is accurate and complete. When an insurer neglects this process, it may lead to situations where critical information is overlooked or misrepresented, potentially rendering the proposal void or unenforceable.

In insurance contracts, the principle of utmost good faith (uberrima fides) requires both parties to act honestly and disclose all material facts. If the insurer does not conduct a proper assessment, this could violate that principle, allowing them to reject the proposal based on a lack of proper due diligence.

The other outcomes listed do not accurately reflect the direct implications of failing to assess a proposal form. An insurer is not automatically liable for all claims due to a failure in assessment, nor does this affect their license directly. Additionally, a proposal does not automatically get accepted just because it hasn't been properly assessed; rather, the assessment is a necessary step in the acceptance process.