Non-disclosure – extent of duty
During May 2002 the insured applied for an endowment policy with trauma and disability cover. In the application form two questions of importance were put to her. The first question was whether she has or ever had any disease of the bladder and certain other organs. The complainant answered “Ja” and added in the appropriate space “Blaas-Probleem.” Secondly, she was asked whether she has been to any hospital or had undergone any medical examinations. She likewise answered “Ja” and explained “1989-Historektomie ondergaan.1989-Blaas operasie.” At the request of the insurer the insured was examined by her doctor. The doctor reported that the insured had a hysterectomy in 1998 (not 1989 as stated in the application form). In the report the doctor also mentioned that the insured had a sling fitted in 2001 and that she underwent the Burch procedure in 2000. The doctor’s report confirmed that the insured suffered from a disease of the bladder but no further information was disclosed.
Since her hysterectomy the insured continuously suffered from incontinence. She went for physiotherapy and received collagen injections which she did not disclose to the insurer. Eventually she became disabled because of her incontinence.
The insured’s claim for disability benefits was refused by the insurer on the ground that she did not make a full disclosure of the extent of her disease.
An insured must perform his duty of disclosure properly by making a fair presentation of the risk proposed for insurance. Where the information received by the insurer is of such a nature that it would prompt a reasonable insurer to make further enquiries, a failure to make appropriate enquiries may justify the conclusion that the insurer had waived disclosure of the material facts which such an enquiry would have revealed.
In the present case the insurer’s main contention was that although the insured did disclose in the application form that she had a bladder operation, she did not spell out that she experienced a continuous problem of incontinence and that she received ongoing treatment for this disease. However, it must be borne in mind that the sketchy information supplied by the insured had been supplemented by her doctor who mentioned in her report that the insured had a TVT sling fitted and that she underwent a Burch procedure.
Although the insured indeed did not fully disclose all the particulars of her disease, the information at the disposal of insurer’s underwriters was clearly indicative of the nature and seriousness of the insured’s disease. The insured had complied with her duty of disclosure. A reasonable insurer would have been alarmed by the facts disclosed and would have made further enquiries. This the insurer in the present circumstances omitted to do and for this reason its reliance on non-disclosure was not upheld.
Non-disclosure – change of occupation
En passant, it may be mentioned that the insurance proposer’s actual occupation may also be a factor which a reasonable proposer would regard as material in the underwriting assessment of the risk. As such it should be accurately disclosed. Likewise, there is a duty on the proposer to disclose any prospective change in occupation that may take place prior to the finalisation of the contract. When no such change is imminent the conclusion of the contract freezes the position. If the insurer wants to protect itself against any subsequent changes in occupation which may enlarge the risk it must do so in terms of the provisions of the policy e.g. by specifically or generally excluding liability if the insured should expose himself to certain defined risks, such as participating in inherently dangerous occupations or activities. Non-disclosure relates to pre- and not to post-contractual situations, unless the contract provides differently.