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By Vanessa Irenuma




 A \”material fact\” in an insurance contract refers to a key piece of information or detail that could significantly influence the terms and conditions of the insurance policy. Insurance companies rely on the accuracy and completeness of information provided by the policyholder to assess risk and determine the premium, coverage limits, and terms of the policy. Failing to disclose material facts or providing false information can have significant consequences for the policyholder. Material facts can be determine by evidence, statutory or judicial interpretation or by expert opinion. A fact is considered material for the purpose of construing fraud, non-disclosure and misrepresentation, if it is a fact that would influence a reasonable insurer in deciding whether to accept or reject the risk involve in the contract or to accept or reject the premium to charge on the risk.


Under common law the test of materiality is that of a prudent insurer, a fact is material in the insurance policy if it is the one that would influence the underwriting judgment of a reasonable or prudent insurer. CONTAINER TRANSPORT INTERNATIONAL INC .V. OCEANS MUTUAL UNDERWRITING ASSOCIATION [BERMUDA] LIMITED  the court held that a circumstances of fact is material if it would have influenced the judgment of a prudent insurer in fixing the premium on the insurance or in determining whether he will provide insurance cover for the proposed risk. SECTION 20 (1) OF THE MARINE INSURANCE ACT state that, Subject to the provision of this section, the assured shall disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured shall be deemed to know every circumstance which, in the ordinary course of business, ought to be known by him. The position of the common law will in fact result to hardship for the insured. The insurance act 2003 has come to the rescue in modifying the application of the rule of common law in Nigeria. SECTION 54[1] OF THE INSURANCE ACT state that where an insurer requires an insured to complete a proposal form or other application form for insurance, the form shall be drawn up in such manner as to elicit such information as the insurer consider material in accepting the application for insurance of the risk and any information not specifically requested shall be deemed not to be material.


With this new position of the law dealing with materiality, the onus of proving that any particular fact is material to the insurance contract lies on the insurer and where he fails to draw up a proposal form in such a manner so as to accommodate the obtaining of any information he may requires from the insured, the insurer is subsequently precluded from setting up the materiality of such fact, which was not contemplated in the proposal form, as basis for disclaiming liability on the policy. SECTION 55 [1] OF THE INSURANCE ACT which states that in a contract of insurance a breach of term whether called a warranty or a condition shall not give rise to any right by or afford a defense to the insured unless the term is material and relevant to the risk or loss insured against. The act shall not prevent an insurer from repudiating an insurance contract on the ground of a breach of a material term provided the repudiation happened before the occurrence of the risk insured against.


EXAMPLE OF MATERIAL FACTS the following are some of the facts that are considered material in the insurance contract:


1)    Previous Insurance History: the contract of insurance is contract based on utmost good faith, the insured is expected to fill all material fact when filling the contract/proposal form, especially all facts that border on moral hazards. LOCKER AND WOLF LIMITED .V. WESTERN AUSTRALIAN INSURANCE CO. LIMITED where the court held that the insured failure to disclose the previous insurance history amounted to a breach of the doctrine of utmost good faith.


2)    Previous Criminal History: this is because as a contract of utmost good is good for the insurer to be apprised of the previous criminal history of the proposer. this information is necessary in order for the insurer to be aware of the moral hazards of covering the risk for a person in that category but not to put the insured in any disadvantage position. Allegation of minor criminality that occurred a long time before the proposal would not be considered a material facts. SCHOOLMAN V. HALL in this case the court held that the previous criminal history of the proposal, even if it is of a dim and remote past, was material fact to the policy.


3)   Illness: a contract of insurance is an assurance of indemnity or compensation upon the occurrence of the peril insured against. It therefore means that when the health condition of the insured is of the essence, and so the ill health of the insured is material fact to the success of the contract and so it should be disclosed. CANNING V. FARGUHAR where the court of appeal held that the insurer was not liable under the policy on the grounds of non-disclosure of material fact relating to the ill health of the insured.





1.      Container Transport International Inc .V. Oceans Mutual Underwriting Association [Bermuda] Limited [1982]2 Lloyd”S Rep.

2.      Locker And Wolf Limited .V. Western Australian Insurance Co. Limited (1936)1 K .B.408

3.      Schoolman V. Hall (1951)1 Lioyd’s Rep 139

4.      Canning V. Farguhar(1886)16 QBD 272



Contact: Vanessa Irenuma

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