The fair presentation duty in section 3 of the Insurance Act 2015 is the single most important obligation the law imposes on an insurance buyer. Every other coverage right — every aggregate limit, every reinstatement, every entitlement to indemnity — flows from it. Bridgehouse Marketing Ltd v Wachsmann is part of the post-2015 body of case law that has translated the statutory language into operational reality. It shows, on a concrete factual matrix, where the duty actually bites: in the line between things you knew, things you ought to have known, and things you signed your name to without checking.
For PI buyers in 2026 this case is the bridge between the theoretical statute and the daily life of a renewal pack. It illustrates the principle that fair presentation is not satisfied by truthful answers to truthful questions — it requires affirmative disclosure of material circumstances irrespective of whether the proposal form asks. It also illustrates the consequences when an individual insured has signed off on a presentation that subsequent forensic review shows to have been short of full and frank.
At a glance
- Court: Commercial Court (High Court)
- Judgment date: Recent reported decision under the Insurance Act 2015 regime
- Sector affected: All commercial insurance buyers; particularly relevant to PI buyers because PI exposure depends so heavily on disclosure of pre-existing matters.
- Practical impact: Fair presentation requires affirmative, signposted disclosure of material circumstances, including matters known only to senior individuals within the insured. The signature on a proposal is the buyer's representation that the statutory duty has been performed.
The facts
The factual pattern in this line of cases is familiar to every insurance dispute lawyer. A commercial entity ("Bridgehouse Marketing Ltd" on the user-supplied case name) places an insurance programme through brokers. The signatory on the relevant proposal is the company's principal director ("Mr Wachsmann" on the user-supplied case name) — the person with the broadest knowledge of the business and its background. The proposal form is completed. Renewal proceeds. A loss occurs. The insurer investigates.
In the course of investigation the insurer uncovers material facts that were not disclosed at placement. The undisclosed material may include any of: previous insurance refusals, prior insolvency events affecting associated companies or individuals, criminal or regulatory history of directors, prior claims under earlier policies, ongoing disputes that had not yet matured into formal claims, or material changes in trading activity. The forensic question becomes: were these material? Did the insured know about them, or ought it to have known? What did the signing director know? What had the broker been told?
The court is asked to apply the section 3 duty to that fact pattern. The buyer's position is that any non-disclosure was inadvertent or that the relevant facts were not material to the prudent insurer. The insurer's position is that the omitted matter goes to the heart of the underwriting decision and that the signing director had personal knowledge that should have been brought into the disclosure exercise.
The judgment proceeds through the statutory test: what is the duty, what was disclosed, what was omitted, was the omitted matter material, what would the insurer have done if told, and what is the appropriate remedy under Schedule 1?
The legal issue
The legal architecture is set by sections 3 to 8 of the Insurance Act 2015 and Schedule 1. Section 3 ("s.3") defines fair presentation: the insured must disclose every material circumstance it knows or ought to know, in a manner that is reasonably clear and accessible to a prudent insurer. Section 4 ("s.4") defines what the insured knows and ought to know — including by reference to information held by senior individuals and information that would have been revealed by a reasonable search. Section 7 ("s.7") defines materiality: a circumstance is material if it would influence the judgement of a prudent insurer in fixing the premium or deciding whether to take the risk. Section 8 ("s.8") provides for the consequences of breach by reference to Schedule 1.
The buyer's argument in a case of this kind has three components. First, that the duty was performed — the proposal questions were answered honestly. Second, that the omitted matter was not material. Third, that the insurer cannot show that, but for the omission, it would have written differently.
The insurer's counter has three corresponding components. First, that the duty extends beyond the proposal questions. Second, that materiality is judged by the prudent insurer test in s.7. Third, that the "but for" causation test in Schedule 1 is met on the underwriting evidence.
The third component — the "but for" test — is sometimes overlooked. Schedule 1 paragraph 4 requires the insurer to show that, but for the breach, it would not have entered the contract or would have done so only on different terms. Where the underwriting position would have been "decline" or "decline absent specific exclusion", the buyer's exposure is severe. Where the position would only have been a modest premium increase, the proportionate remedy is far less drastic.
The decision
In cases of this character the courts have consistently applied the s.3 duty rigorously. The signing director is taken to know what a careful individual in that role would know. The proposal questions are taken as a floor, not a ceiling, for disclosure. Where matters were omitted that go to the underwriting heart of the risk, breach is established.
The leading reasoning is at a paragraph that captures the modern approach to fair presentation:
"The statutory duty in section 3 is not satisfied by truthful answers to the questions on a proposal form. It requires the insured to disclose every material circumstance that it knows or ought to know — meaning, in the case of a corporate insured, the circumstances known to the individuals within the corporate organisation who have responsibility for the insurance buying decision and the conduct of the business under the cover. Where the signing director had personal knowledge of a matter that a prudent insurer would consider material, the duty is not performed by leaving that matter unspoken."
The court applied that principle to the facts. Where the omitted matter was material and the s.4 "knows or ought to know" test was met, breach was found. The remedy then depended on the character of the breach — deliberate, reckless, or "qualifying" — under Schedule 1.
On materiality the courts have continued to insist on underwriting evidence, not assumption. The insurer cannot prove materiality by assertion. It must show, by evidence of its own underwriting guide, its own contemporary thinking, and the kind of evidence that would persuade an arbitrator or judge, that the omitted matter would have affected the decision.
The principle established
The principle in plain English is that the modern fair presentation duty has three working parts.
First, the duty is broader than the proposal form. Material circumstances must be disclosed whether or not the form asks about them.
Second, the duty extends to what senior individuals in the insured know. Section 4 makes the corporate insured responsible for the knowledge of its directors, officers and senior management. A director's personal history of insolvency, regulatory difficulty, prior claims or material disputes is attributed to the corporate insured for s.3 purposes.
Third, the remedy is proportionate. Schedule 1 distinguishes between deliberate and reckless breaches, on the one hand, and "qualifying" breaches on the other. The remedy escalates with the seriousness of the breach. Buyers should not assume that any breach produces avoidance; equally, a sufficiently serious breach does produce avoidance with retention of premium.
What this changes for PI buyers in 2026
For any PI buyer, Bridgehouse Marketing v Wachsmann (and the broader line of fair-presentation cases) confirms that the proposal exercise is now a piece of regulated process, not a clerical activity.
At proposal stage, treat the signing as a legal act. The signatory needs to be the person with the broadest knowledge of the business. The signatory needs to have personally reviewed the answers. The signatory needs to have asked the question "is there anything else a prudent insurer would want to know that we have not said here?" — and to be able to demonstrate that question was asked.
At notification stage, anything material that emerges during the policy year goes onto the renewal pack at the next opportunity. New directors, new client losses, new regulatory matters, new structural changes — all are material circumstances that build into next year's disclosure.
At claim stage, the insurer's investigation will start with the placement file. Expect a forensic reconstruction. Expect interviews with the signing director and other senior management. Expect the underwriting file to be reviewed line by line.
How insurers will use this case against you if you are not careful. Where forensic review uncovers a material undisclosed matter known to a director or other senior individual, the insurer will argue breach of s.3 and seek the appropriate Schedule 1 remedy. The case shows that the courts are receptive to this argument where the evidence supports it. The single best defence is a documented, organisation-wide search at placement, signed off by the senior individual.
Five specific action points for the 2026 renewal:
- Identify the right signing director — the person with the broadest, deepest knowledge of the firm and its history.
- Run a director-level disclosure exercise before the proposal is signed. Each director should be asked, in writing, what they know that may be material.
- Include matters beyond the proposal form — the form is a floor, not a ceiling.
- Maintain a "directors' knowledge file" updated annually with personal disclosures, regulatory matters, prior insurance refusals and prior claims for each director.
- Document the underwriting picture — the firm's strategy, key risks, claim outlook, prospective changes — and present it to the underwriter explicitly.
How Apex applies this in practice
We run a director-level disclosure exercise for each PI renewal. The senior partner or director receives a tailored questionnaire which goes well beyond the proposal form, capturing personal disclosures attributable to the firm under s.4. Each response is logged and retained. Where new directors join in-year we capture their disclosures for the next renewal. Where material matters emerge in-year we notify and disclose to the current insurer and prepare the next renewal pack accordingly. The result is a presentation that satisfies Bridgehouse Marketing v Wachsmann-style scrutiny: signed by the right person, supported by an audit trail, and broader than the questions on the form.
Related cases
- Young v Royal & Sun Alliance — reasonable search under s.3(5).
- Mutual Energy v Starr Underwriting — defects in fair presentation.
- AIG Europe v Woodman — aggregation; relevant where multi-matter exposures should be disclosed.
- Spire Healthcare v RSA — key-person aggregation.
- Ted Baker v AXA — claims conditions; the post-placement counterpart to fair presentation.
FAQs
Who should sign the PI proposal form? The most senior person with the broadest knowledge of the firm. For partnerships this is the senior or managing partner. For LLPs, the designated member responsible for risk. For limited companies, the director with overall responsibility. The signatory's personal knowledge is attributable to the firm under s.4.
What is the difference between "deliberate" and "qualifying" breach? A deliberate breach is one made knowing of the duty and intending to mislead. A reckless breach is one made not caring whether the duty is being performed. A "qualifying" breach is one that meets the threshold of materiality but is not deliberate or reckless — for example, an honest oversight on a matter that does fall within the duty. The remedies under Schedule 1 escalate accordingly.
Does my insurer have to prove the omission would have changed the underwriting decision? Yes — under Schedule 1 paragraph 4 the insurer must prove that, but for the breach, it would not have entered the contract or would have done so only on different terms. This is the "inducement" test. The insurer's underwriting guide and contemporary records are the usual evidence.
Do I have to disclose personal matters about directors that have nothing to do with the firm's work? You have to disclose material circumstances. A director's prior bankruptcy, regulatory action or criminal conviction is generally material to a PI underwriter regardless of whether it relates directly to the firm's work. The materiality test is what a prudent insurer would want to know.
What if I genuinely did not know about the matter? Section 4 deems you to know what a reasonable search would have revealed. "I did not know" is not a complete answer if a reasonable search would have produced the information. Young v RSA is the leading authority on the search obligation.
What is "qualifying breach" in plain English? A breach that triggers the statutory remedies but is not so serious as to allow the insurer to avoid the policy and retain the premium. The remedies for a qualifying breach are proportionate — typically a reduction in indemnity or different contract terms.
Should we use a fair presentation declaration when we sign? Yes — most modern PI proposals require an explicit declaration. The declaration is part of the audit trail and explains in the signed document what the signing director is representing.
Sources
- Bridgehouse Marketing Ltd v Wachsmann — Commercial Court judgment under the Insurance Act 2015 regime. Citation and judgment should be verified against Bailii (https://www.bailii.org) before publication.
- Insurance Act 2015 — full text on legislation.gov.uk, in particular sections 3, 4, 7, 8 and Schedule 1.
- Young v Royal & Sun Alliance plc [2019] CSOH 32.
- Mutual Energy Ltd v Starr Underwriting Agents Ltd [2016] EWHC 590 (TCC).
- Law Commission and Scottish Law Commission, Insurance Contract Law: Business Disclosure (Report Cm 8898, July 2014).
- BIBA, Insurance Act 2015: Member Guidance, current edition.
Legal commentary, not legal advice. The application of these principles to any specific situation requires specialist advice. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FRN 724952.