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An Underwriter is Entitled to a Fair Presentation of the Risk.

Article Excerpt
Defining the limits of waiver in relation to non-disclosure by an Assured: a clarification of the situation in which an Insurer can be deemed to have waived the right to full and fair disclosure of claims history.

It is well-established that a contract of insurance is a contract of utmost faith. Accordingly, there is a duty on the party proposing for insurance to give full and fair disclosure to the Insurer of all material facts known to him and unknown to the Insurer. If the duty of utmost good faith is not observed, the contract may be avoided by the Insurer.

It is also established law that the Insurer can waive its right to full and fair disclosure of material facts which have not been disclosed if, knowing of prejudicial facts and/or knowing that material facts have not been disclosed, it accepts a presentation and issues a policy. The burden of proving such waiver is on the Assured who asserts it, and he must show a clear case.

The recent case of George Henry Stowers -v- (1) G A Bonus plc & (2) Helm Insurance Brokers Limited (presently unreported, but in which judgement was handed down on the 1st of January this year) in the Central London County Court Business List clarified the previously uncertain situation in which an Insurer issues a policy on the basis of an incomplete proposal form by relying instead on the placing information that has been passed to him during the course of the...