In common law, when must material facts be disclosed by a commercial policyholder for a general insurance policy?

Material facts must be disclosed by a commercial policyholder for a general insurance policy during negotiations for the contract, right up until the commencement of cover. This requirement is fundamental to the principles of utmost good faith (uberrimae fidei) that govern insurance contracts.

From the outset, both the insurer and the insured have a duty to disclose information that might influence the other party's decision to enter into the contract or the terms of that contract. The policyholder is expected to provide all relevant information that might affect the insurer's assessment of risk. This duty extends through negotiations and remains until the insurance coverage officially begins.

In contrast, the other options do not encompass the comprehensive requirement of disclosure throughout the negotiation process, nor do they highlight the timing necessary for the disclosure of material facts. While an increase in sums insured or a claim could warrant further disclosures or claims to be made, they do not relate to the initial duties during the formation of the contract itself. Additionally, the notion of disclosing material facts only on demand by the insurer or when a claim occurs is not consistent with the proactive obligation a policyholder has at the onset of the insurance arrangement.