Material Misrepresentation

A false or misleading statement on an insurance application that, if known by the insurer, would have affected its decision to issue the policy or the terms of coverage. In malpractice insurance, material misrepresentation can include understating revenue, failing to disclose practice areas, omitting known claims or circumstances, or misrepresenting the number of attorneys. If discovered, it can result in policy rescission — retroactive cancellation as if the policy never existed — leaving the firm uninsured for all claims during that period.