ABSTRACT
Insurance contracts are said to be contracts uberrimae fidei or contracts of utmost good faith. As a result, there is a duty of disclosure on both sides of the contract. But the most important aspect of the duty is that a person proposing insurance must disclose all facts16 material to the insured risk. The justification for this approach is said to be that the insurer is engaged in a process of speculation and needs to know as much as possible so as to allow him to ‘compute the contingent chance’.17 For these purposes, it is important to emphasise that what must be disclosed are facts relevant to the risk, which might serve to affect the mind of a prudent insurer in deciding whether to accept the risk or what premium to set.18 Moreover, it seems that for these purposes a fact is material if a prudent insurer would wish to consider it even if it later transpires that the fact has not, in any way, influenced the insurer’s decision on whether to accept the risk.19
