Utmost good faith

Facts which ought to be known by the insurers

The duty of disclosure set out in s18 of the Marine Insurance Act 1906 is subject to a series of exceptions. Section 18(3)(b) provides that the assured is not required to disclose facts which are known or which are presumed to be known to the insurer. Facts are within presumed knowledge if they are ‘of common notoriety or knowledge, and matters which an insurer in the ordinary course of his business as such ought to know’. The application of this exception to wide-ranging insurance provided to a commodity trader under an open cover was considered by Moore-Bick J in Glencore International AG v Alpina Insurance Co [2004] 1 Lloyd’s Rep 111 , a case which shows that the duty of disclosure is severely restricted in these circumstances. The case also deals with the validity of declarations made under a non-obligatory contract and with aggregations. Two further issues which are not of general importance arose in a sequel ruling by Moore-Bick J, given on 23 January and to be reported in [2004] 1 Lloyd’s Rep.