What is the specific legal duty of disclosure when acquiring an additional risk during the insurance period?

The specific legal duty of disclosure when acquiring an additional risk during the insurance period is to make a fair representation of the additional risk. This obligation is critical because it ensures that the insurer is fully aware of the new risk being introduced into the policy, which can significantly affect the terms, conditions, and pricing of the coverage.

When a policyholder adds an additional risk, it is essential that they provide accurate and complete information regarding that risk. This might include details about the nature of the new risk, any prior claims associated with it, its potential impact on the overall risk profile, and any other relevant factors. A fair representation means presenting this information honestly and without omission, allowing the insurer to assess the risk appropriately.

In contrast, while disclosing previous claims is important, it is not the sole focus when acquiring a new risk, as the primary duty lies in representing the characteristics of that new risk effectively. Maintaining current rates is unrelated to the duty of disclosure unless rates are influenced by the new risk, and automatically covering subsidiaries typically requires explicit agreement in the policy rather than being a duty of disclosure.