This a Latin phrase that means utmost good faith. This is a legal doctrine that governs insurance contracts. All the parties to this contract must act in good faith by disclosing all material facts in the insurance proposal. Agatha has had asthma since she was a child. While getting insurance, she filled a form detailing her health history but left out the fact that she had always suffered from asthma. One day, she got a terrible asthma attack and wanted the insurance company to pay for her treatment.
The insurer in this case, can refuse to pay claiming that while sharing information about her
history, Agatha did not act in “utmost good faith” in leaving out such relevant details.