What if the insurance policies are being renewed?
Before entering into or renewing an insurance policy, the insured must typically disclose all available information held by it relating to the risks that will be covered. The insurer needs this information to decide the level of premium and the terms on which cover will be provided.
This process is known as pre-contractual disclosure. The precise scope of the insured’s duty to give pre-contractual disclosure is sometimes set out in the policy. Information that does not give rise to a notification obligation is often still caught by this duty. When an incident occurs, you should consider whether you are in the process of obtaining or renewing insurance policies to which the incident might be relevant. If you are, discuss with your insurance broker and legal advisers whether information regarding the incident must be supplied to the insurer.
Failing to provide information caught by the pre-contractual disclosure obligation can have serious consequences. In certain circumstances, an insurer can avoid all liability under an insurance policy if the insured has not complied with its duty of pre-contractual disclosure.