What is a significant risk of intentional misrepresentation on an application?

• A. The insured will not be able to file a claim.
• B. The insurer may void the policy and you could face an E&O claim.
• C. The insured will automatically be denied coverage.
• D. There are no consequences.

Answer: (B)

Intentional misrepresentation on an application is fraud that undermines the contract because an insurer relies on truthful disclosures to assess risk. When misrepresentation is proven to be deliberate, the insurer has the right to rescind or void the policy, sometimes retroactively to the start date. That means coverage may be treated as never having existed, and claims for that period can be denied. At the same time, the agent or producer who facilitated the misrepresentation can face an errors and omissions (E&O) claim for professional liability.

So this option captures the strongest and most realistic consequence: the policy can be voided, and you could face an E&O claim. It’s not just a denial of coverage, and there are real consequences for both the insured and the agent.