Misrepresentation definition:
According to IRMI, Misrepresentation is defined as:
A false or misleading statement that, if intentional and material, can allow the insurer to void the insurance contract. Some insurance policies and state laws that govern insurance contract provisions vary on the exact details of the conditions under which coverage may be voided; these variations are usually denoted in state amendatory endorsements.
Having a claim denied for misrepresentation is a terrible outcome. The peace of mind associated with insurance coverage is based upon a claim being paid. If you misrepresent information and your insurance company finds out, your net worth is exposed.
Avoid this at all costs, double check all facts, figures and information shared with your insurance company. Your broker is also responsible for this condition, make sure your broker is accurate in all statements to the insurance company.
Although you may have recourse against the broker under a E&O policy for a false statement leading to denial of coverage, this is not the route you want to go down – costly and confrontational is longer to recoup or recover from your loss than the upfront effort of avoiding misrepresentations.
