So, here are 5 reasons why you should disclose business activities.
1 – To ensure you’re covered
Just because you have an insurance policy for your business, it does not mean your policy automatically covers you for everything. So, a ‘she’ll be right’ attitude can have a significant financial impact that can delay or prevent you from achieving long-term business growth.
2 – Disclosure of business activities is a wise investment
Insurance is only as good as the information you provide. So, the more business activities you withhold to save money, the riskier your business future becomes.
While the cost of premiums can seem expensive, they are small compared to the cost of any legal defence fees and financial penalties you may incur.
In today’s litigious environment, no business relationship is free of risk. You may encounter unforeseen problems with employees, suppliers, investors, competitors, customers, government agencies, regulators, and creditors.
3 – To build an accurate risk profile
Your insurer will build a risk profile for your business based on the information you provide. A risk profile considers your industry, occupation, location, how long you’ve been in business, claims history and more.
The information determines how they rate your business for insurance purposes. It determines whether they can underwrite the risk and calculate an accurate premium to protect your business interests.
4 – To meet your duty of disclosure
All insurance policies have a Duty of Disclosure in the contract. Suppose you fail to disclose business activities to your insurer. In that case, they are within their rights to refuse to provide cover when it comes to claiming time.
When you accurately disclose all business activities and keep your insurer up to date, your insurer can underwrite your business risks accurately. It puts you in a stronger position at claim time.
Case Study Example:
A business entity decides to hold a ticketed music festival, but it fails to disclose the activity to its insurer. They assume that existing insurance will cover the event because they are a licensed venue. A ticket holder trips on a power cable leading to the stage and breaks their arm, leading to income loss. The business entity is sued and pays out legal defence costs of $50,000 plus a personal injury claim of $700,000.
Outcome: Due to non-disclosure of the event, the insurance company declined the claim.
5 – Insurance is a legally binding contract
Business owners must acknowledge that an insurance policy is a legally binding contract. Therefore, you should treat your insurance policy like any other legal contract.
Always ensure you understand all the terms and conditions of your policy. An experienced risk and insurance adviser can help you understand your policy, its limits, and exclusions.
It’s essential to check that the policy meets your business needs and risk profile.
Is it time for an insurance health check?
Risk and insurance brokers / advisers, such as Clear Insurance, use their extensive knowledge of your industry to help you understand your business risks and your duty of disclosure.
Your adviser will guide you through your business risks and explain the risk transfer options available to you so that you can make confident decisions about whether to keep, mitigate or transfer your risks to insurance to safeguard you and your business.
Ask about our no-obligation risk and insurance review for complete peace of mind.
Last Updated: 20 May 2026