Duty of Disclosure
What is duty of disclosure?
The duty to disclose material information to insurers has always been a fundamental principle of insurance.
In the hard insurance market it is possible, if not probable, that insurers will take a more strict stance on claims generally.
Non-disclosure of material information is one area where insurers are likely to become more focused in the event of a claim.
What is the Definition of material information?
Material information is information that would influence an insurer in deciding whether a risk is acceptable and, if so, the premium, terms and conditions to be applied.
Failure to disclose all such information could result in the policy being rendered void, so that claims would not be paid.
Why do I need to disclose material information?
All material information must be disclosed to insurers to enable terms to be negotiated and cover arranged. This is not limited to answering specific questions that may be asked. Any changes which may occur or come to light after a quotation has been given must also be notified.
The duty to disclose is re-imposed when there are changes or variations in cover and when the policy is renewed or extended. In addition, changes which substantially increase the risk, or relate to compliance with a warranty or condition in the policy must be notified at once.
Examples of material information may include:
- New product lines
- Changes in alarm fire protection systems
- Driver convictions
- New Business Activities
To ensure that cover is not prejudiced please refer to the University Insurance Officer if there is any doubt as to what information needs to be disclosed.