Who does the principle of duty of disclosure apply to in insurance contracts?

The principle of duty of disclosure in insurance contracts emphasizes the obligation of both the proposer and the insurer to be transparent and honest regarding relevant information. For the proposer, this means they must disclose all material information that could influence the insurer's decision to provide coverage, including any facts that might affect the terms of the insurance policy or the risk assessment.

On the other hand, the insurer is also expected to disclose important details that could affect the proposer’s decision, such as exclusions or specific conditions of the policy offerings. This mutual duty ensures that both parties engage in fair practice, allowing for informed decision-making when entering into a contract.

By adhering to this principle, both parties work towards building a trustworthy relationship, which is crucial in the insurance industry. Understanding the importance of this principle helps in recognizing the shared responsibility in the disclosure processes, ultimately safeguarding the interests of both the insurer and the insured.