UNDERWRITING & DISCLOSURE
Duty of disclosure definition
Duty of disclosure is an insurance obligation requiring parties seeking cover to disclose material facts that may affect underwriting or policy terms.
In practice, this means this term relates primarily to the duty on any party seeking insurance cover to disclose to the underwriter all those facts that may affect the granting or rating of insurance cover, i.e. material facts. The term may also be used in reference to underwriters,... This gives insurers, brokers, reinsurers and risk managers a shared way to discuss the concept when reviewing policies, claims, regulation or market data.
This term is especially useful in insurance market analysis, policy wording and risk transfer decisions. It helps determine when cover applies and what obligations exist under the insurance contract. It also helps users compare how insurance is structured, regulated, priced or claimed across different markets.
Duty of disclosure is closely related to material fact, utmost good faith, underwriting and policy conditions. Linking these concepts together helps build a clearer glossary structure and gives readers a stronger understanding of how individual insurance terms connect within wider international insurance practice.
At a glance
- Used in
- Insurance market analysis, policy wording and risk transfer decisions.
- Purpose
- Helps determine when cover applies and what obligations exist under the insurance contract.
- Important because
- Clear definitions support better comparison of insurance products, market practices and regulatory requirements across jurisdictions.
- Related terms
- material fact, utmost good faith, underwriting and policy conditions.
Example of duty of disclosure in insurance
A company applying for insurance knows about a previous loss pattern. The duty of disclosure requires relevant material information to be provided to the insurer before cover is agreed.