Insurance is valuable to society, so we all have an obligation to keep it going Origins Lecture It is still just easier for insured to disclose, rather than Dawn of insurance industry; to have insurance company spying on you to find out. Limited access to information Times have changed; information age Is there a continuing justification for disclosure duty given enhanced accessibility to information today? 2. Duty of Disclosure Issue Where Ratio Notes What must an Carter v. Facts: insurance for a Fort in case it was attacked. Fort Insured only has duty to insured Boehm was attacked by the French, also it very fortified. disclose all material facts wasn’t disclose? Insurer said breach of disclosure b/c leader of Fort knew w/n their sole knowledge. French were planning attack. But so did everybody Limits on Insured does not have to was all over the news. No breach. Disclosure disclose what insurer actually knows or could -also no duty to disclose suspicion Fort may be attacked, know with reasonable that is just speculation and not fact. efforts. Insured does not have to disclose future speculation or only past and opinions… present FACTS Effect of BCIA s. (1) A contract is not rendered void or voidable by reason of any misrepresentation, or any 17 failure to disclose on the part of the insured in the application or proposal for the insurance or otherwise, unless the misrepresentation or failure to disclose is material to the contract. (2) The question of materiality is one of fact. Conclusion Lecture Therefore, must always consider whether the fact was: Material Within the knowledge insured’s To determine whether disclosure duty breached. Test for Materiality Issue Where Ratio Notes Is a Ontario Insurer Q of fact, objectively “Reasonable Test” Material Metal determined Fact? Products Not relevant what a If the fact is one which would have adversely affected a reasonable insured would reasonable decision to underwrite the risk at insurer’s think is material the stated premium, either by charging more or refusing
Insurance is valuable to society, so we all have an obligation to keep it going Origins Lecture Dawn of insurance industry; Limited access to information Times have changed; information age Is there a continuing justification for disclosure duty given enhanced accessibility to information today? It is still just easier for insured to disclose, rather than to have insurance company spying on you to find out. 2. Duty of Disclosure Issue Where Ratio Notes What must an insured disclose? Carter v. Boehm Insured only has duty to disclose all material facts w/n their sole knowledge. Facts: insurance for a Fort in case it was attacked. Fort was attacked by the French, also it wasn’t very fortified. Insurer said breach of disclosure b/c leader of Fort knew French were planning attack. But so did everybody was all over the news. No breach. -also no duty to disclose suspicion Fort may be attacked, that is just speculation and not fact. Limits on Disclosure Insured does not have to disclose what insurer actually knows or could know with reasonable efforts. Insured does not have to disclose future speculation or opinions… only past and present FACTS Effect of BCIA s. 17 (1) A contract is not rendered void or voidable by reason of any misrepresentation, or any failure to disclose on the part of the insured in the application or proposal for the insurance or otherwise, unless the misrepresentation or failure to disclose is material to the contract. (2) The question of materiality is one of fact. Conclusion Lecture Therefore, must always consider whether the fact was: Material Within the insured’s knowledge To determine whether disclosure duty breached. Test for Materiality Issue Where Ratio Notes Is a Material Fact? Ontario Metal Products “Reasonable Insurer Test” If the fact is one which would have adversely affected a reasonable insurer’s decision to underwrite the risk at the stated premium, either by charging more or refusing Q of fact, objectively determined Not relevant what a reasonable insured would think is material