Failure to reveal a material fact needed to assess or continue the risk.
Non-disclosure is the failure to reveal a material fact that the insurer needed to know in order to assess, price, issue, or continue the insurance risk properly.
The issue is not that every omitted detail matters. The issue is whether the missing fact was important enough to affect the insurer’s decision.
This term matters because insurance relies on material facts being available to the insurer. If an important fact is left out, the policy may have been issued or continued on a basis that no longer reflects the real risk.
That is why non-disclosure is closely tied to misrepresentation, representation, and utmost good faith.
In Canadian insurance, non-disclosure can arise:
Examples can include omitted business use of a dwelling, failure to report a major occupancy change, unreported hazardous operations, or important medical information left out of life or disability underwriting.
The practical question is whether the insurer would have acted differently if it had known the omitted fact. If the answer is yes, the omission may become materially important.
| File stage | Example of possible non-disclosure |
|---|---|
| Original application | Applicant leaves out a secondary rental use, hazardous activity, or important medical fact |
| Renewal | Insured does not mention a change that should have been disclosed for the new term |
| Midterm change | Risk changes materially but the insurer is not told before a loss occurs |
| Endorsement request | Only part of the relevant picture is described when asking for a change |
A property owner applies for home insurance and does not mention that the basement is being rented out separately with a higher turnover of occupants. If that fact would have changed underwriting, the missing information may amount to material non-disclosure.
That example is why non-disclosure usually has to be read beside representation. One page answers what was said; the other answers what was left unsaid.
The biggest mistake is assuming non-disclosure only exists when the insured deliberately hides information. Deliberate concealment is serious, but a material omission can still matter even when it arose through carelessness or misunderstanding.
Another mistake is treating non-disclosure and misrepresentation as entirely separate worlds. In practice, they often overlap. One involves an inaccurate statement; the other involves a material omission.
Readers also sometimes assume disclosure duties end once the policy is issued. That is too simplistic. Renewal and midterm changes can still matter.
It is also wrong to assume any unmentioned detail creates the same level of risk. The real issue is materiality: would the insurer have accepted, priced, inspected, endorsed, or continued the policy differently if it had known the fact?
The practical consequences depend on product type, wording, materiality, and timing. Not every omission has the same effect, but significant undisclosed facts can have serious contractual consequences.