3The duty of fair presentation
(1)Before a contract of insurance is entered into, the insured must make to the insurer a fair presentation of the risk.
(2)The duty imposed by subsection (1) is referred to in this Act as “the duty of fair presentation”.
(3)A fair presentation of the risk is one—
(a)which makes the disclosure required by subsection (4),
(b)which makes that disclosure in a manner which would be reasonably clear and accessible to a prudent insurer, and
(c)in which every material representation as to a matter of fact is substantially correct, and every material representation as to a matter of expectation or belief is made in good faith.
(4)The disclosure required is as follows, except as provided in subsection (5)—
(a)disclosure of every material circumstance which the insured knows or ought to know, or
(b)failing that, disclosure which gives the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purpose of revealing those material circumstances.
(5)In the absence of enquiry, subsection (4) does not require the insured to disclose a circumstance if—
(a)it diminishes the risk,
(b)the insurer knows it,
(c)the insurer ought to know it,
(d)the insurer is presumed to know it, or
(e)it is something as to which the insurer waives information.
(6)Sections 4 to 6 make further provision about the knowledge of the insured and of the insurer, and section 7 contains supplementary provision.