Insurance

It was settled law that the concept of materiality extended beyond the risk of damage occurring within the scope of the policy, and included “moral hazard”, whereby there was an increase in the likelihood of it being made to appear falsely that loss or damage had occurred falling within the scope of the policy. Incidents of prior dishonesty by a proposer were capable of being material whether or not they had been detected or had led to conviction. Moral hazard described circumstances, invariably involving dishonesty on the part of the assured, which gave rise to a concern that there would be dishonesty in reporting the presentation of claims. The test of materiality operated by reference to what would influence the judgment of the prudent underwriter.

It was also settled that to show fraud, the insurer had to establish the use by the insured of some lie to seek to improve or embellish the facts surrounding the claim,