A. On March 16, 2011, the Defendant, who operates a furniture factory in B (hereinafter “instant factory”), concluded a fire insurance contract (hereinafter “instant insurance contract”) with the Plaintiff, an insurance company, as shown in the attached Table 1, with the purpose of insurance, with the entire machinery and facilities of the instant factory and the instant factory, finished products of the said factory, semi-finished products, and movable assets as indicated in the said attached Table.

B. The instant special terms and conditions on fire damage security (hereinafter “instant special terms and conditions”) stipulate as follows.

Article 17 (Duty to Notify After Contract) (1) Where any of the following events occurs for an insurance purpose after a contractor or the insured enters into a contract, he/she shall promptly notify the company in writing and obtain confirmation on the insurance policy:

5. Where a building, the insurance object of which is an insurance, or a building containing the insurance object, is inefficient for at least 30 consecutive days or is temporarily suspended.

7. In addition to the above, if the danger clearly increases, the Company may terminate this contract within one month from the date it becomes aware of the existence of the loss, regardless of the occurrence of the loss, in the following cases:

2. Where he/she fails to perform his/her duty to notify after concluding a contract prescribed in Article 17 (1) with respect to a significant increase in risk;

C. On May 14, 2014, around 00:30, a fire that was caused by the factory in this case was destroyed, and the above factory building and its inner movables were destroyed.

On June 27, 2014, the Plaintiff notified the Defendant that the instant insurance contract was terminated pursuant to Article 18(1) on the ground that the Defendant did not perform its duty of notification after concluding the contract under Article 17(1) of the instant Special Terms and Conditions.

[Grounds for recognition] Gap evidence Nos. 1 through 5, the purport of the whole pleadings

2. Article 652(1) of the Commercial Act provides that the risk of an accident to the policyholder or the insured is significantly changed during the insurance period.