Before entering into a contract of insurance with Chubb Insurance New Zealand Limited (Chubb), each prospective insured has a duty to disclose to Chubb information that is material to Chubb’s decision whether to accept the insurance and, if so, on what terms.
This includes material information about the insured, any other people and all property and risks insured under the policy. Information may be material whether or not a specific question is asked.
There is the same duty to disclose material information to Chubb before renewal, extension, variation or reinstatement of a contract of insurance with Chubb.
The insured should also provide all material information when they make a claim or if circumstances change during the term of the contract of insurance.
It is important that each prospective insured understands all information provided in support of the application for insurance and that it is correct, as each prospective insured will be bound by the answers and by the information they have provided.
The duty of disclosure continues after the application for insurance has been completed up until the time the contract of insurance is entered into.
If an insured fails to comply with their duty of disclosure, Chubb may be entitled, without prejudice to its other rights, to reduce its liability under the contract in respect of a claim or refuse to pay the entire claim. Chubb may also have the right to avoid the contract from its beginning. This means the contract will be treated as if it never existed and no claims will be payable.