Which process ensures that both parties in an insurance contract are aware of material facts?

Disclosure is the process that ensures both parties in an insurance contract are aware of material facts that could affect the terms and conditions of the agreement. In an insurance context, material facts refer to any information that could influence an insurer's decision-making process regarding coverage, premiums, and underwriting.

When the insured party discloses all relevant material facts to the insurer, it fosters transparency and trust, which are key in creating a fair and effective insurance contract. This principle helps prevent misunderstandings and disputes that might arise later if one party was unaware of critical information.

While negotiation, assessment, and confirmation are important parts of the insurance process, they do not specifically focus on the exchange of crucial information. Negotiation pertains to the discussion and agreement on terms, assessment involves evaluating risks or policy details, and confirmation generally refers to acknowledging agreements made. None of these processes directly address the necessity of making sure that all material facts are shared and understood, which is the core purpose of disclosure.