Why might an insurer require continuing disclosure for public liability contracts?

In the context of public liability insurance, requiring continuing disclosure is essential for the insurer to remain informed about any changes in the insured's business activities. Public liability insurance covers the legal liability of the insured for injuries or damages caused to third parties during the course of conducting their business. Changes in business activities, such as expansion into new markets, alterations in business practices, or modifications to products or services offered, could significantly alter the risk profile associated with coverage.

If the insurer does not receive timely information about these changes, they may face challenges in accurately assessing the risk and pricing the premium accordingly. Moreover, failing to disclose such changes could lead to disputes during a claim process, where the insurer might argue that the coverage no longer applies due to undisclosed alterations in risk. Thus, requiring continuing disclosure ensures that the insurer maintains an up-to-date understanding of the insured's operations and associated risks, facilitating appropriate coverage and premium calculations while helping to safeguard both the insurer and the insured against potential liabilities.