What Does Disclosure Mean?
Disclosure is the complete and full revealing of information relevant to a particular issue. In the context of insurance, it refers to each party’s duty to accurately reveal pertinent information in an insurance contract. In other words, it means that neither the insurer nor the party seeking insurance should withhold critical information while making an insurance contract.
Insuranceopedia Explains Disclosure
When an insurance contract is being made, legal consequences can follow if proper disclosure does not occur. For example, if a person seeking life insurance hides relevant medical information, such as the fact that they had a heart attack, it forces the insurer to take on a larger risk than they expect. Upon the discovery of this misrepresentation, it may result in termination of the policy with or without a refund of premiums. As insurance contracts are legally binding, each party has an obligation to be honest and disclose pertinent details.