Material Facts & Duty of Disclosure
It is also 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 (i.e. all information which would influence the judgement of a prudent Insurer in determining whether to underwrite the risk and if so, upon what terms and at what premium). If all such information has not been disclosed, Insurers have the right to avoid the contract from its commencement, which may lead to claims not being met. If you believe that you may not have complied with this duty, you should contact us immediately.
Changes affecting either material facts or your business activities must be immediately notified to us. It is your responsibility to advise your insurers immediately of any changes, which may affect your insurance risks, and/or which vary the details provided on the original proposal forms/statement of facts/presentations. Failure to do so could invalidate your cover.
Examples of material facts include:
- Acquisition of new companies and/or mergers
- Changes to your business description
- Additional product lines and/or new services
- Supplying products not within the description already declared
- Hazardous trade processes, or storage of hazardous matter, including changes or additions to processes or storage already declared
- Purchase, construction or occupancy of new premises
- Sub-letting of premises and/or changes in tenure
- Alterations, vacation, temporary unoccupancy, extension or demolition of existing premises
- Additions of or extensions to plant and machinery
- Removal of stock or equipment to new locations
- Contractual liabilities, granting of indemnities or hold-harmless agreements
- Alteration, amendment to or disconnection of protective systems or withdrawal or threat of withdrawal of attendance or other services otherwise expected e.g. intruder alarms, sprinkler systems and fire alarms.
- Incidents not reported to insurers that might otherwise have led to a claim e.g. theft or small fires
- Prosecutions or convictions including pending
- Planning of a major development or expansion
- Changes in occupancy or process of manufacture
- Alterations in type, quality, or storage of dangerous goods
- Alteration or disconnection of fire or security protection systems
- Acquisition of interest in another company or organisation
- Dependence on a new supplier or customer
- Use of private aircraft or water craft
- Introduction of new products
- Changes in export markets, especially where this involves North America
- Conviction of a driver for a motoring offence
- Any driver suffering a major health problem or disability which could adversely affect driving ability
- Use of vehicles airside at airports and airfields
- Products intended for use in aircraft or aerial devices
- Carriage of dangerous goods in vehicles
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 as described above. On discovery of non-disclosure you may be penalised in terms of cover being restricted or premium loadings being imposed, if indeed Underwriters are prepared to continue cover.
In addition you may, from time to time, be asked to complete a proposal form for Insurers or provide other written information which will form the basis of an insurance contract such as a Statement of Fact. When providing such documents it is important to understand that all answers or statements made are your responsibility and that if incorrect information is provided it could result in a claim being repudiated on the basis of non-disclosure or misrepresentation. All information requested on a proposal form is a material fact and changes in that information should always be notified to us promptly