Fair presentation is not a one-way obligation. Section 5 of the Insurance Act 2015 sets out what the insurer knows, ought to know or is presumed to know, and a firm does not need to disclose those matters. This prevents an insurer from later avoiding a claim on the basis of something it plainly already understood.
Section 5(1) covers what is actually known to the individuals who participate in the decision to take the risk, the underwriter and those advising them. Section 5(2) covers what an insurer ought to know: information held by the insurer and readily available to those individuals. Section 5(3) covers what an insurer is presumed to know, which section 5(4) breaks into things that are common knowledge, and things a prudent insurer offering that class of insurance would reasonably be expected to know in the ordinary course of business.
The presumed-knowledge limb is significant for specialist professional indemnity. An insurer that writes surveyors' PI is taken to understand the ordinary risks of valuation work; an insurer writing technology PI is taken to understand that software projects overrun. A firm need not lecture the underwriter on the general features of its profession. It must, however, disclose the specific circumstances of its own practice.
The distinction is between general market knowledge, which the insurer is presumed to hold, and firm-specific fact, which only the firm holds. That a certain class of valuation attracts claims is trade knowledge. That this particular surveyor has three such valuations under query is a material circumstance the firm must present. Surveyors weighing this balance can see the wider picture in the surveyors' PI guide.
Section 5 does not license a firm to withhold. It narrows the field to what genuinely adds to the insurer's picture. Technology consultants, addressed in the IT professionals' PI guide, should still disclose their own contract disputes even though the insurer understands the sector's general risk profile. Apex helps clients judge that line so a presentation is complete without being padded.
Together with sections 3 and 4, section 5 means a firm is judged against a reasonable, informed insurer, not one entitled to feign ignorance. That protects a well-run practice that presents its risk honestly.
The narrowing effect of section 5 works alongside the proposal form. Where an insurer asks a specific, limited question, it signals the scope of what it wants to know, and a firm answering that question accurately is not obliged to volunteer material outside it unless the wider matter is independently material. This is the doctrine of waiver reflected in section 3(5)(e). Reading the proposal questions carefully, and answering exactly what is asked while still flagging anything genuinely unusual, is the practical way a firm respects both sections 3 and 5 at once.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.