i. Definition of “Material Fact” in a Contract of Insurance
A material fact in an insurance contract is any information that would influence an insurer’s decision to accept the risk, set the premium, or outline the terms of coverage. Material facts include details that significantly impact the assessment of the risk being insured. The insured party has a duty to disclose all material facts fully and accurately, as failure to do so may lead to the insurer voiding the policy.

ii. Exceptions to the Duty of Disclosure of Material Facts

1. Facts Known or Presumed to be Known by the Insurer: There is no duty to disclose information that is common knowledge or already known to the insurer.
2. Facts that Reduce the Risk: The insured does not need to disclose information that only reduces the level of risk, as this would not affect the insurer’s willingness to cover the risk.
3. Information Waived by the Insurer: If the insurer waives the requirement for certain disclosures, the insured is not obliged to disclose those particular facts.