Insurance legislation has shifted significantly in recent years, and with it, the expectations placed on businesses when arranging cover. Historically, insureds carried a heavy burden: they had to disclose every circumstance known — or that should have been known — that might influence an insurer’s decision.
With the introduction of the Insurance Act 2015, the burden is somewhat lighter, although still important to get right. The Act replaced the old “catch‑all” disclosure rules with a duty to provide a fair presentation of the risk to insurers. Below, we break down what that really means, what insurers expect, and how to stay compliant with confidence.
What does ‘fair presentation’ actually mean?
A fair presentation of the risk requires you to share all material circumstances you know — or ought to know — in a way that is clear and accessible.
What constitutes ‘material’?
The test of materiality initially depends on the opinion of a reasonable insurer, but this has led to some questionable debates. For example the case of Roselodge Ltd-v- Castle [1966], the insurer tried to argue that it was material to an application for insurance many years later, that the insured was caught stealing apples at the age of 12. This was ridiculed at the time, but is a good example of how difficult it can be to agree what is in fact material.
In short, ‘material information’ includes any information that would influence a prudent insurer when deciding whether to insure you, at what premium, and on what terms. Examples include (but aren’t limited to):
- Unusual or unique aspects of your business activities
- Any concerns that prompted you to seek insurance
- Information the market would reasonably expect to see in a risk profile
- Changes to your business (new operations, acquisitions, restructuring)
- Legacy activities or historic subsidiaries
- Activities in territories or client sectors not previously disclosed
- All claims, incidents, complaints, or circumstances that might give rise to a claim
- Regulatory actions or interactions
- Any past cancellations, voided policies, declined renewals, or refused claims (including for directors, partners, family members, or connected businesses — even dormant ones)
- Director’s criminal convictions, bankruptcy, insolvency, or disqualifications
- Details of all directors, including recent leavers
For claims-made policies, (i.e. those policies that respond to claims coming in, regardless of when the loss occurred) both your legacy activities and your current operations are material.
When does the duty apply?
Your duty isn’t a one‑off event — consider it an ongoing responsibility. You must disclose material information:
- Before a policy is first placed; and
- When a policy is renewed; and
- Whenever policy terms are varied; and
- Throughout the policy period (if your policy includes a continual duty of disclosure — many do).
The safest approach? Treat disclosure as a continuous obligation.
How far must you look?
You are required to disclose every material circumstance which you know or ought to know following a ‘reasonable search’ of information.
This search should involve making enquiries of:
- Senior management (including shadow directors)
- Anyone responsible for insurance matters
- Internal teams and external experts (e.g., accountants, lawyers) who may hold relevant information
- All entities within your group structure, including subsidiaries
We strongly recommend keeping a written audit trail of who you asked, what they said, and when — invaluable evidence if you ever need to demonstrate that your search was indeed “reasonable.”
What happens if things go wrong?
Failing to disclose material information — or providing incomplete or inaccurate responses — can jeopardise your insurance cover.
If the breach is deliberate or reckless:
The insurer may avoid the policy entirely, refuse any claims, and keep the premium.
If the breach is not deliberate or reckless:
The insurer will consider what they would have done had you made a fair presentation.