You should never fail to disclose this sort of thing, to avoid the insurers relying on the legal principle of "utmost good faith". This means that they can vitiate the contract if they find you did not disclose something they decide is relevant. Not only does this mean you don't get a payout, but it can also affect other proposals which ask " have you ever had insurance cover declined, or has an insurer failed to pay". The safest way is to say on the proposal form exactly what has happened. Even if the new insurer decides to exclude the risk, or accept the risk with a higher premium, you do not risk having any claim even on something different turned down. Sorry to be a bit legalistic. I might not know much about how to train the smelly spaniel beside me, but I was a lawyer for 30 years!
I have stayed with my original insurer for this reason!