In his article Insurers: To Rescind Or Not to Rescind?, insurance expert witness Akos Swierkiewicz writes:
A policy may be rescinded even after a loss that would otherwise be covered by the policy. Since rescission could have severe negative financial impact on the insured, the insurer must be certain that the reasons for rescission are based on solid grounds and able to withstand potential legal challenge.
In a 2001 case, an insurer rescinded their policy following a major fire loss, alleging material misrepresentation and concealment by the insured, pertaining to several matters, including square footage of the premises.
The pre-trial discovery proceedings included examination of ambiguous questions contained in the insurer’s application form, and the accuracy of the inspection report provided by an independent inspection company retained by the insurer.