Disclosing Material Facts in Insurance Contracts – What is this?

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When seeking insurance it is your duty to inform the insurer of every material fact. This applies when getting quotes for new insurance. It is also necessary if you are making alterations to an existing policy or at renewal of your policy. Non-disclosure of a material fact can invalidate a policy and the insurer can cancel a policy or refuse to pay a claim if you fail to reveal all material facts when applying or renewing insurance.


It is understood that you have provided complete and accurate information to Insurers and that you have complied with your legal duty to disclose before inception of the insurance contract, all material matters relating to the risk. Changes affecting either material facts or your business activities must be immediately notified as failure to do so could invalidate your cover.This requirement does not stop once insurance cover is in place as you are under a continuing obligation to notify Insurers of any ‘material facts’ and alterations to risk.


Types of Material Facts to be Disclosed:

  • Changes to your business description
  • Prosecutions or convictions, receivers or judgements,  including those pending
  • Special terms and conditions applied under previous policies, if any
  • Previous losses incurred and claims made under previous insurances (whether insured or not)
  • A fact which increases the risk must be disclosed e.g. storage or use of flammable materials, working at increased heights, materials used in the construction of a structure, work in hazardous or high risk exposure areas



Remember –Before you enter a contract of general insurance with an Insurer, you have a duty, under the Insurance Contracts Act 1984 to disclose to the Insurer every matter that you know or could reasonably be expected to know, which is relevant to the Insurers’ decision whether to accept the risk of insurance

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