Disclosure Guidance


sign on a grey wall showing the words danger disclosureYour professional indemnity insurance policy requires full disclosure...

...of all material information and the new Insurance Act places even more emphasis on the policyholder that this is done correctly.

This requirement increases the burden on the person responsible for buying the insurance, because material information is any information that will influence an underwriters rating or decision on providing cover. Given that this is open to interpretation, it’s a grey area and the most common cause of disputes with Insurers.

In recent years, insurance companies have significantly reduced the amount of information they require for quotation purposes. At first, this may seem to benefit the policyholder because it means less form filling. However, it does in fact create potential non-disclosure problems for the Insured; just because the proposal form doesn't ask the question doesn't mean you don't need to tell the Insurer.

Quite simply, the less information you provide about your firm, the more chance of something not being declared and there being a gap in your cover. Unless full disclosure is given at all times, a firm runs the risk of a claim not being covered or their policy cancelled.