Disclosure
Disclosure is the legal duty of an insurance applicant to the insurance company to reveal all the pertinent information that may have any influence on the insured risk. The duty of disclosure of all material facts is not just relevant to the insured but also to the insurer. This disclosure must take place before a new insurance contract is issued and also when the contract comes up for renewal.
Disclosure can also be defined as a revelation made in good faith of facts that may not be general knowledge. Uberrimae Fidei – of the utmost good faith – has always formed part of our contract and insurance law. The Appellate Division of the courts decided in 1985 that good faith was an impractical way of measuring disclosure.
Although utmost good faith is still used as a reference The Reasonable man test is now widely used by our judicial system in cases where disclosure or non-disclosure played a part. The insured must provide the insurer with all the relevant information required that any reasonable man would have accepted as material to the risk. It will not be acceptable as defence to state that the facts were not revealed as the insured thought them unimportant or irrelevant.