An insurance company's failure to enforce a contract's provision is called a(n)

• A. Waiver
• B. Breach
• C. Estoppel
• D. Lapse

Answer: (A)

Waiver is the voluntary relinquishment of a known right. In a contract, that can happen through how a party acts or chooses not to enforce a provision. When an insurance company decides not to enforce a contract provision, it’s effectively giving up that right to enforce it, which is the essence of a waiver. This differs from a breach, which would be failing to meet a contractual duty in the first place. Lapse refers to expiration or termination of a policy, and estoppel involves preventing enforcement due to someone’s prior actions or representations. So the act of not enforcing a provision fits the idea of waiver.