Duty of Disclosure

Our relationship with you is reciprocal.

All insureds must act in utmost good faith and integrity in all dealings with the insurer or provider of cover. It is a reciprocal duty that applies to us as RMS, the insurer, as well as to you, preventing all parties from doing anything which is unfair or unreasonable.

Please click on the heading below relevant to your geographic location to read full details about your duty.

This information is relevant to Adventist entities within Australia.

INSURANCE CONTRACTS ACT 1984 (CTH) DUTY OF UTMOST GOOD FAITH AND OTHER INSURANCE CONTRACTS – DUTY OF DISCLOSURE

All insureds owe the insurer a duty of utmost good faith and integrity in all dealings with the insurer. It is a reciprocal duty that applies to the insurer as well as to you, preventing either party from doing anything which is unfair or unreasonable in contravention of the duty. If you fail to act in accordance with the duty of utmost good faith then to the extent permitted by law, the insurer may refuse your claim, cancel your policy, or both.

Your duty is set out below:

Before you enter into an insurance contract, you have a duty of disclosure under the Insurance Contracts Act 1984. You have a duty to tell us anything that you know, or could reasonably be expected to know, may affect the insurer’s decision to insure you and on what terms. You have this duty until the insurer agrees to insure you. You have the same duty before you renew, extend, vary or reinstate an insurance contract.

If we ask you questions that are relevant to the insurer’s decision to insure you and on what terms, you must tell us anything that you know and that a reasonable person in the circumstances would include in answering the questions.

Also, we may give you a copy of anything you have previously told us and ask you to tell us if it has changed. If we do this, you must tell us about any change or tell us that there is no change. If you do not tell us about a change to something you have previously told us, you will be taken to have told us that there is no change.

You do not need to tell us anything that reduces the risk insured, is common knowledge, the insurer knows or should know as an insurer or the insurer waives your duty to tell them about.

If you do not tell us something

If you do not tell us anything you are required to, the insurer may cancel your contract or reduce the amount it will pay you if you make a claim, or both. If your failure to tell us is fraudulent, the insurer may refuse to pay a claim and treat the contract as if it never existed.

CHANGE OF RISK OR CIRCUMSTANCES

It is vital that you advise the insurer (via RMS) of any changes to your company’s usual business. For example, insurers must be advised of any

  • mergers or acquisitions,
  • changes in occupation or location
  • new products or services, or
  • new overseas activities

Please contact us if you are in doubt as to whether to notify your insurer of a change in business operations.

Your duty to disclose applies also when you amend, alter, vary or endorse a policy.

INSURING THE INTERESTS OF OTHER PARTIES

If you require the interest of another party to be covered by the policy, you MUST request this. Most policies will attempt to exclude indemnity to other parties (e.g. mortgagees, lessors, principals etc.) unless their interest is expressly noted on the policy.

LOSSES / CLAIMS

Please let us know whether there are any losses which have occurred that have not been reported to us/insurers, whether you intend making a claim or not.

This information is relevant to Adventist entities within New Zealand.

 Duty of Disclosure

You have a common law duty to disclose all material facts before entering into, renewing or altering a contract of insurance. If you fail to do so, or if any material facts are misrepresented, the insurance could be made void.

The Insurance Law Reform Act defines a material fact as one that would influence a prudent insurer in accepting or rating a risk. Your common law duty of disclosure applies only before each contract is entered into, renewed or changed, but some policies have a condition that extends the duty throughout the period of insurance.

Your duty of disclosure does not include facts which are common knowledge. Nor does it include facts already known to your insurer, or which ought to have been known to your insurer in the ordinary course of business. If in doubt, it is safer to disclose information than to conceal it.

Utmost Good Faith

Every insurance contract is subject to the doctrine of utmost good faith, which requires that parties to the contract should act toward each other honestly and fairly, avoiding any attempt to deceive in assuming and performing contractual obligations.

Failure to do so on the part of the insured may permit the insurer to refuse to pay a claim or to cancel the policy or both.

Changes and Disclosure

It is important that you advise us immediately of any changes or developments to your business that would be material to your insurance programme. Examples include:

  • Acquisition of or merger with another company, newly created or acquired subsidiaries.
  • Any new claim, or potential claims incident, that has not been reported to your insurers.
  • Business undertaken that is outside the scope of the description in your policies.
  • The purchase, construction or occupancy of new premises.
  • Alteration, vacancy, unoccupancy, extension or demolition of premises.
  • Increase in values beyond the insured limits on property.
  • Significant removal of stock or equipment to different locations.
  • Assumption of liability or waiver of recovery rights under the terms of any agreement or contract.
  • Hiring, leasing or borrowing of vehicles, plant or equipment.
  • Charter of aircraft or watercraft.
  • Substantial change in processing methods, occupancy of premises, or products.
  • Development of new export markets, particularly in North America.
  • Alteration to or disconnection of your fire or burglary protection systems.
  • Proposed installation or modification of pressure plant, refrigeration plant or key machines.
  • Issue of a prospectus, information memorandum or other documents in connection with the sale of the company’s own securities.
  • New outside directorships undertaken during the policy period.
  • Changes to the Indemnity or Insurance clauses in the Company’s Constitution.

This list is not exhaustive. Generally, you should let us know about any matter that might have an effect on the adequacy or validity of your insurance.

Many policies contain an express condition requiring notification of any changes that materially increase the risk as originally proposed to the insurer. Breach of such a condition could invalidate cover.

LOSSES / CLAIMS

Please let us know whether there are any losses which have occurred that have not been reported to us/insurers, whether you intend making a claim or not.

 

This information is relevant to Adventist entities in the Pacific Islands (excluding PNG) that participate in the Pacific Island Property Protection Fund

Responsibility to Notify

You have a responsibility to tell us all material facts before entering into, renewing or altering arrangements under the Pacific Island Property Protection Fund. If you fail to tell us, or if any material facts are misrepresented, your protection under this Fund could be cancelled or RMS may refuse to pay a claim.  You don’t need to tell us facts which are common knowledge or that RMS already know about.   If you aren’t sure we recommend you tell us.

Changes and Notification

It is important that you tell RMS immediately when there are changes including but not limited to:

  • If you have a new claim or a potential claim.
  • If you purchase, build or occupy new premises.
  • If you alter, vacate, extend or demolish premises you own.
  • If you need to change (increase or decrease) the sums insured.