Generally refers to a question typically contained in an original claims-made insurance application that requires the insureds to disclose any known fact or circumstance that could reasonably give rise to a claim in the future. By signing the application, the insureds “warrant” or represent that they have disclosed all such known facts or circumstances. This warranty is typically not included in a renewal application since the insurer is already at risk for such potential claims if the insureds elect to give a notice of circumstances or notice of potential claim to the insurer as provided in the policy.****Statement made on an application for Insurance that the applicant warrants to be true. If untrue in any respect, without the applicant’s knowledge, the warranty has been breached and any Insurance relating to that warranty is void, without regard to the materiality of the breach. A statement may be construed as a warranty even though it is not so labeled. However, in most lines of Insurance other than ocean marine, state statutes and court decisions tend to interpret warranties as representations, so that their breach does not void coverage unless the breach materially increased the chance of loss or was consciously concealed by the insured. Under products liability a warranty is a statement or representation, made by the seller of goods, at the time of and as part of the contract of sale, that the product is as represented. It is a statement of fact with regard to the quality or charter of the product.*****
Where an insured or reassured promises that something will or will not be done during the period of cover or that a particular state of affairs exists or does not exist at the inception of cover. If the promise is untrue or is not kept then the insurer/reinsurer may disclaim all liability under the policy from the date of the breach, regardless as to whether the false declaration was material to the underwriting of the contract or causative of any loss.