What is typically required from an insured party regarding disclosures?

The requirement for an insured party to disclose all material facts is rooted in the principle of utmost good faith, or "uberrima fides," which underpins insurance contracts. This principle mandates that both parties act honestly and transparently. When obtaining insurance, the insured must provide any information that could influence the insurer's decision to provide coverage or determine the terms and pricing of the policy.

Material facts include not only those that are apparent but also those that the insurer might not readily know. For example, an individual's medical history, business practices, or any previous claims are relevant disclosures that could significantly impact underwriting decisions. Failure to disclose such material facts can result in claims being denied or policies being voided because the insurer relied on incomplete or misleading information.

In contrast, focusing solely on business-related risks or claims history would limit the scope of disclosure and could lead to incomplete risk assessments. Additionally, it is the insurer’s responsibility to clarify policy obligations, not the insured's. Therefore, the comprehensive disclosure of all material facts ensures fairer and more accurate assessments of risk for both parties involved.