…whether or not the Insurer asks for the specific information. Please read this document carefully as any failure to disclose material information to your insurers may adversely affect the performance of the insurance contract.
An insured should at all times act with utmost good faith towards the insurer. The insured must disclose to insurers all information, facts or circumstances which are, or ought to be known to the insured and which are material to the risk.
When providing information or completing a proposal form the insured should take care that the details provided are complete and accurate. The insured should note that their duty of disclosure is not only confined to the questions listed in the form. All material facts should be disclosed to insurers regardless of whether the insurer has asked for it.
Under English law every circumstance is material if it would influence the judgement of a prudent insurer in fixing the premium and terms of the insurance, or determining whether to accept the risk. A circumstance may be material even if disclosure would not necessarily have led to an increased premium or declinature of the risk. If the insured is unsure whether a fact is material our advice is that it should be declared.
An insured’s duty of disclosure applies throughout the negotiation preceding placing of the insurance policy until the insurer has agreed to accept the risk and set the terms, premium and level of participation and the insurance contract finalised. A post contract duty of disclosure extends to:
Non disclosure by the insured may allow the insurer to avoid the policy even if the non disclosure is accidental and irrelevant to a claim. An insurer can also seek recovery of any prior paid claims under the avoided policy.
Business activities or any changes to business activities whether or not covered by the proposal form questions
This list provides examples only and is not a exhaustive list. If in any doubt, disclose.
This guidance note is intended for information purposes only. It is not and does not purport to be legal or accountancy advice. Whilst all care has been taken to ensure the accuracy of the guidance note it is not to be regarded as a substitute for specific advice. This guidance note shall not be reproduced in any form without our prior permission. © 2018 All copyright is owned by Lex Insure Services Ltd