To what extent must a commercial policyholder disclose an additional risk acquired during the insurance period?

A commercial policyholder is obligated to disclose any additional risks that were acquired during the insurance period. This requirement stems from the principle of utmost good faith, or "uberrima fides," which mandates that both parties in an insurance contract, namely the insurer and the insured, must act honestly and disclose all material facts relevant to the contract.

By fairly representing only the additional risk that has come into existence during the policy term, the policyholder is adhering to this principle. It recognizes that while the insurer needs to be informed of new risks that could affect the likelihood of claims or losses, there isn't a requirement to re-disclose risks that were already known at the outset of the policy unless they have changed in nature or severity. Thus, appreciating that the duty to disclose applies specifically to newly identified risks ensures that the relationship remains fair and transparent without overwhelming the insurer with previously disclosed information.

In contrast, the other options suggest broader obligations that do not align with the nuanced approach to risk disclosure for additional risks acquired after the policy inception. The stance that all existing risks must be disclosed does not account for the distinction between pre-existing and additional risks, while claiming “no need for disclosure” would undermine the fundamental duty of good faith. Lastly, indicating that only known