What is a duty of disclosure?
You have a duty to make a fair presentation of the risk to be insured to the insurer. This requires the disclosure of any information which would influence the judgement of a prudent insurer in deciding whether to accept your insurance, impose special terms, or charge an increased premium.
A proposal or any other document relating to the contract of insurance, must be answered fully and accurately. All representations must be substantially correct if relating to matters of fact, or made in good faith if they are matters of expectation or belief. Please do consider the questions regarding “any other information” very carefully in the light of the duty of fair presentation. The provision and documentation of this information is your responsibility.
Please be aware that a failure to make a fair presentation of your risk may affect the payment of your claims, cause additional charges to be made by the insurer, or even invalidate the policy.
You are required to disclose what should “reasonably have been revealed by a reasonable search of information available to you”. Please note that this includes what is in the knowledge of all senior management within your organisation (senior officers not just directors), and what is known to other organisations.
Information must be disclosed in a way which is reasonably clear and accessible to a prudent insurer.
This duty arises not only at inception of the policy but also at renewal or in the event of any material change in your risk during the period of insurance.
If you have any doubt as to what constitutes a relevant fact or circumstance please do not hesitate to ask for advice. Our contact details can be found here.