Where an insurer specialises in insuring a particular industry known to attract persons of disreputable character, a reasonable insured is not required to disclose associations with criminal organisations unless those associations give rise to risks beyond those inherent in the insured activity. The absence of questions in the proposal directed to such associations is a significant factor. Under s 28(3), the onus is on the insurer to establish on the balance of probabilities that it would not have been on risk; where the non-disclosed matter could easily have been remedied by the insured, the insurer must prove the insured would not have done so.
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