A warranty is a statement that is considered guaranteed to be true and, once declared, becomes an actual part of the contract. Typically, a breach of warranty provides sufficient grounds for the insurance contract to be voided (declared unenforcable) e.g Some Fire insurance policy for business premises may contain a ‘Records Warranty’,
This warranty states that the insured should keep Records of all purchases, sales & banking records pertaining to the business in a fire proof safe or away from their premises outside business hours’ When a fire occurs and a claim for stock is initiated and its discovered that the insured did not have such records the insurance company may declare the contract void hence claim not payable.