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Strata Tip #69: Insurance – Duty of disclosure

Under the Commonwealth legislation, Bodies Corporate have a duty to disclose “every matter that is known to the insured” which the Body Corporate knows to be relevant, or would reasonably expect to be relevant, to an insurer when deciding whether to issue a policy. The duty of disclosure arises again at renewal time when an insurer can ask specific questions and / or give the Body Corporate back its’ earlier disclosure material and ask if there has been any change. The Body Corporate must answer those questions and / or identify any changes.Failure to comply with the duty of disclosure can lead to the contract of insurance being avoided or the insurer being placed in a position (with respect to liability) as if the duty of disclosure had been discharged.