
I presume it can't be a bad one if the breeder didn't mention it and you didn't notice it, I would contact the insurance company as this would have been a pre existing condition prior to the insurance being activated.
Only the severe ones need surgery, a breeder friend of mine sent her hubby off to the vets with a newborn pup who had a large opening in her abdomen and bowel hanging out thinking the vet would PTS, less than an hour later he came back with pup, the vet had shook the bowel back into the abdomen and sutured it up and told them to keep an eye on her, she was fine but went to a pet home as there may have been a chance she would produce pups with the same problem.