Fair presentation checklist for UK professional firms
The Insurance Act 2015 imposes a duty of fair presentation on commercial clients at inception, renewal, and material variation. Section 3 defines the duty; section 4 the standard for material information. This checklist unpacks what that means in practice for a professional firm preparing PI renewal.
The two parts of the duty
Part 1 — disclose every material circumstance
The insured must disclose every material circumstance which the insured knows or ought to know. A circumstance is material if it would influence the judgement of a prudent insurer in determining whether to take the risk or on what terms.
Part 2 — make disclosure in a reasonably clear and accessible manner
The presentation must be reasonably clear and accessible to a prudent insurer. Not just factually complete — organised, indexed, and inviting scrutiny.
Section 5 — the ‘knows or ought to know’ test
For firms, ‘knowledge’ is what senior management and those responsible for arranging the insurance actually know, plus what they ought to know from a reasonable search of information available to them.
This is the section that trips firms up. A partner in the litigation team may know about a client complaint that hasn't yet crystallised. That knowledge is imputed to the firm for fair-presentation purposes, whether or not the compliance-officer knew.
The 10-point disclosure checklist
- Firm structure and ownership — legal entity, group companies, ownership changes since last renewal.
- Practice mix and revenue breakdown — percentage of fee income by activity type. Insurers price on this.
- Claims and circumstances history — every notification, claim, complaint or circumstance in the last five years (or longer for some regulators). Include disciplinary matters.
- Regulatory matters — FCA/SRA/ARB/etc. supervisory attention, investigations, or open enquiries.
- Personnel changes — departures of senior professionals, new hires with claims history.
- Client base changes — new sector concentration, new large clients, loss of major clients.
- Contract structure changes — move to fixed-price, deed execution, new PI-relevant contract terms.
- Cover changes — changes to any other insurance policies that interact with PI (D&O, cyber, EL).
- Territorial exposure changes — cross-border work, foreign-office openings.
- Material litigation or enforcement — even where not resulting in a paid claim.
The presentation format that works
What insurers dislike
- Long-form narrative with buried facts.
- Disclosure in scattered attachments without index.
- Late-disclosed material information via email supplement.
- Boilerplate answers to underwriter questions.
What insurers respond to
- Structured questionnaire completion with indexed schedules.
- Numbered disclosures with clear headings.
- Explicit statements: ‘There has been no material change from last renewal in the following areas...’
- Voluntary additional disclosure of any borderline material fact, explicitly identified as such.
What happens when fair presentation fails
Deliberate or reckless non-disclosure
Insurer can avoid the policy from inception. All premium refunded. No claim payment. Catastrophic outcome.
Careless non-disclosure
Proportional remedies under Insurance Act 2015 s.8. Insurer may reduce claim payment proportionally to what would have been charged had disclosure been fair.
Innocent non-disclosure
No remedy for the insurer. Cover continues as bound. Standard proof burden on the insured.
Common failures
- Complaint or circumstance the compliance officer knew about but didn't include — imputed knowledge.
- Historical claim not disclosed because it ‘didn't result in a payment’ — circumstances count too.
- Regulatory matter under investigation but not yet concluded — still material.
- Client base shift toward higher-risk sector not disclosed.
- Departing partner's claims history not disclosed when they leave.
- Change in contract structure not disclosed at renewal.