ABSTRACT
Underlying all stages of the relationship between insured and insurer is an important substratum of obligation, the reciprocal duty of good faith. The strictness of the duty of disclosure varies according to the phase in the relationship; for there "may be incidents of that relationship which require different duties, with different duties, in different contexts". The duty of good faith is owed mutually between the insurer and the insured, and it is owed by the insurer to the insured alone and not. According to the general common law guidelines for the existence of a duty of care and damages for breach of duty, first, loss of the type suffered by the claimant must be a foreseeable consequence of the breach alleged. Second, there must be proximity: "such close and direct relations that the act complained of affects a person", the claimant, "whom the person alleged to be bound to take care would know would be affected by his careless act".
