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Insurance Conditions Precedent

Video available at https://youtu.be/I1ByB3cE34E. 

When used in contract law, the word condition refers  to an event, the occurrence or non-concurrence of which alters the  previously existing relations of the parties by creating or  extinguishing a legal duty. A condition is different from a promise or  warranty. When used in an insurance policy the condition imposes duties  on the insured (the promisor) and gives a corresponding right to the  insurer (the promisee). Breach of a condition gives the insurer legal  justification for refusing to perform its obligations under the policy.

There are two types of conditions:

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• conditions precedent; and
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• conditions subsequent.
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The distinction is significant in the resolution of insurance  disputes because it determines the allocation of the burden of proof.  The insured has the burden of proving the fulfillment of a condition  precedent. The insurer has the burden of proving that a condition  subsequent has not been fulfilled in order to avoid liability.

A condition precedent is an event, not certain to occur, which must  occur, unless its non-performance is excused, before performance under a  contract becomes due. [Restatement (Second) of Contracts \\xa7 224 (Am. Law Inst. 1981); accord IDT Corp. v. Tyco Grp., 13 N.Y.3d 209, 214 (2009); Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co.,  86 N.Y.2d 685, 690 (1995).] While no particular words are necessary to  create a condition, the words \\u201cif\\u201d or \\u201cprovided,\\u201d as well as the phrases  \\u201cprovided that,\\u201d \\u201con condition that,\\u201d \\u201cin the event that\\u201d usually  connote an intent for a condition rather than a promise. [13 Samuel Williston & Richard A. Lord, Williston on Contracts \\xa7 38:16 (4th ed. 1990, updated 2019); accord MHR Capital Partners LP v. Presstek, Inc., 12 N.Y.3d 640, 645 (2009)].

The violation of a condition precedent precludes recovery. [Gordon v. St. Paul Fire & Marine Ins. Co., 163 N.W. 956, 957 (Mich. 1917); Yeo v. State Farm Ins. Co., 555 N.W.2d 893, 895 (Mich. Ct. App. 1996).\\u201d Durasevic v. Grange Ins. Co. of Mich. (6th Cir., 2019)]