Students of the law of contract know that, because insurance contracts are contracts of “utmost good faith”, applicants for insurance must disclose “material facts” to the insurer concerned. Students may not know what the law says is material and might be surprised if they did. General contract law distinguishes a misrepresentation of fact from one of opinion. If facts are untrue, the contract may be rescinded, but unfounded opinions have no such effect. The prudent contractor must ignore mere gossip but not so, it seems, when contracting insurance.

Clearly, a medical opinion that an applicant for life or health insurance has cancer has to be disclosed: British Equitable Ins. Co. v. Great Western Ry. (1869) 20 L.T. 422. The opinion of Aunt Jane that the applicant looks peaky does not. Again, if the applicant has been charged with a criminal offence, he remains “innocent until proved guilty.