Non-disclosure is failing to disclose information that is material to the insurer’s decision to take on the risk. Misrepresentation is providing information that is materially inaccurate. Both can lead to remedies under the Insurance Act 2015, but they are conceptually distinct breaches of the insured’s duty of fair presentation.
What each term means
Both concepts sit inside the duty of fair presentation imposed on commercial policyholders by section 3 of the Insurance Act 2015. The duty requires the insured to disclose every material circumstance the insured knows or ought to know, or to make disclosure sufficient to put a prudent insurer on notice that it needs to make further enquiries.
Non-disclosure is the failure to disclose a material circumstance that the insured knew or ought to have known. The insured remained silent on something it should have raised.
Misrepresentation is a statement, in answer to a question or in a presentation document, that is materially inaccurate. The insured spoke but spoke incorrectly.
The distinction matters because the factual investigation and evidential proof differ. Non-disclosure looks at what the insured knew but did not say; misrepresentation looks at what the insured said and whether it was right. The remedies under the Insurance Act 2015 are largely the same, but the path of analysis is different.
How the Insurance Act 2015 treats each
The Act overhauled the previous common-law and Marine Insurance Act 1906 regime. Three features matter.
Duty of fair presentation. Replaces the older duty of “utmost good faith” disclosure for commercial insureds. The new duty requires either (a) full disclosure of every material circumstance known or constructively known, or (b) disclosure sufficient to put a prudent insurer on notice that further enquiry is needed. Either approach satisfies the duty. See PI utmost good faith for the older concept.
Materiality and inducement. A circumstance is material if it would influence the judgement of a prudent insurer. A misrepresentation has remedy consequences only if the insurer was induced — i.e. would have acted differently had it known the true position.
Proportionate remedies. The Act introduced proportionate remedies depending on whether the breach was deliberate or reckless, or merely careless. Deliberate or reckless breach allows the insurer to avoid the policy and retain the premium. Careless breach permits proportionate adjustment — the insurer may apply the terms it would have applied had it known the true position (higher premium, additional exclusions, additional warranties), or, where the insurer would not have written the risk at all, avoid the policy with refund of premium.
The distinction between non-disclosure and misrepresentation does not change the remedy regime, but it can affect the factual conclusion. A failure to mention a known issue may more readily be characterised as deliberate than an answer that turns out to be incorrect due to a misunderstanding.
Worked UK example
A medium-sized accountancy firm completes a proposal at renewal. Three matters arise.
Matter A: The proposal asks for fee income by service line. The firm gives accurate figures for audit and tax but omits a small advisory fee stream of £180,000 a year. The omission is non-disclosure of the advisory income.
Matter B: The proposal asks “have you had any claims or circumstances notified in the last five years?” The firm answers “no”, forgetting a small notified circumstance from three years earlier that closed without a payment. This is a misrepresentation in the answer.
Matter C: The proposal asks about anti-money-laundering procedures. The firm describes its procedures correctly but does not mention a regulator visit two months earlier that flagged concerns. Whether this is non-disclosure or misrepresentation depends on whether the description of procedures was rendered inaccurate by the visit — which is a fine line.
Under the Insurance Act analysis:
- The insurer must show the omission/answer was material and induced its decision.
- For matter A, the omitted £180,000 may not be material if it is a fraction of overall fees, but if the advisory work is high-risk (tax avoidance schemes) it likely is. The remedy depends on whether the omission was careless or deliberate.
- For matter B, the misrepresentation is careless if the firm genuinely forgot, deliberate or reckless if the firm decided not to mention it. The remedy adjusts accordingly.
- For matter C, the analysis turns on whether the regulator visit changed the “true” position about the firm’s procedures.
The outcome under the Act is calibrated to the facts and is far less binary than the pre-2015 position, which could result in complete avoidance for any material breach regardless of fault.
When the distinction matters
Three contexts make the non-disclosure / misrepresentation distinction practically important.
Defending a coverage challenge at notification. When an insurer raises a coverage issue based on proposal-stage breach, characterising the matter as non-disclosure or misrepresentation drives the investigation: what was known, what was asked, what was answered. Defence counsel will analyse each contested point.
Renewal questionnaire design. Insurers structure renewal questionnaires to convert what might be non-disclosure (silence) into misrepresentation (specific answers). A specific question — “have you reviewed your books and records for any matter in the last 12 months that might become a claim?” — converts the duty to volunteer information into the duty to answer accurately.
Senior management responsibility. The Act attributes to the insured the knowledge of senior management and those responsible for arranging the insurance. Who in the firm knew what becomes a central inquiry, particularly when there is later dispute over whether something was “known”.
Common variations
The legal landscape around fair presentation has several variants:
- Consumer insurance. Governed by the Consumer Insurance (Disclosure and Representations) Act 2012 — a separate, consumer-only regime. Most PI is commercial and falls under the 2015 Act.
- Contractual warranties. Separate concept from disclosure. See PI warranties vs representations.
- Pre-renewal “no known circumstances” warranty. A specific assurance in the proposal that becomes a warranty and operates differently from general non-disclosure. See PI renewal warranties.
- Innocent non-disclosure. Where the insured did not know and could not reasonably have known. The duty is not breached at all in this case.
- Reasonable search and signposting. Section 4 of the Act describes what a reasonable search by the insured looks like, and section 3(4) allows signposting — drawing the insurer’s attention to areas where more enquiry may be needed.
Related concepts
- PI utmost good faith — the predecessor common-law duty.
- PI renewal warranties — specific warranties given at renewal, distinct from general disclosure.
- PI warranties vs representations — strict warranties vs representations of fact.
- Insurance Act 2015 — the governing statute.
- PI fraudulent claim clause — separate Act provisions on dishonest claims.
Frequently asked questions
What is the difference between non-disclosure and misrepresentation?
Non-disclosure is failing to volunteer material information you knew or should have known. Misrepresentation is giving an answer that is materially inaccurate. The first is silence; the second is incorrect speech.
Which is more serious?
Neither is inherently more serious. Both are breaches of the duty of fair presentation under the Insurance Act 2015. The remedy depends on whether the breach was deliberate, reckless or careless, not on which kind of breach.
Can the insurer void my policy for innocent mistakes?
For careless breaches, the insurer applies proportionate remedies — typically adjusting cover to what it would have written had it known the truth. Complete avoidance is generally reserved for deliberate or reckless breach, or for cases where the insurer would not have written the risk at all.
What is fair presentation?
The Insurance Act 2015 duty to disclose all material circumstances or to disclose enough to put a prudent insurer on notice that further enquiry is needed. Fair presentation is the modern UK commercial insurance disclosure standard.
Whose knowledge counts?
The insured’s. Section 4 attributes the knowledge of senior management and the persons responsible for the insurance. The insured is expected to make a reasonable search of information available within the organisation.
Does answering specific questions release me from the duty to disclose other things?
No. Specific questions narrow the focus but do not exhaust the duty. Material information outside the questions still needs to be presented, by direct disclosure or by signposting that further enquiry would be useful.
Can the insurer add an exclusion mid-term for non-disclosure?
If a careless breach is discovered mid-term, the insurer may, depending on what it would have done at inception, apply the wording adjustments retrospectively. The policy may end up with different terms than originally agreed.
What is signposting?
A way of meeting the duty without disclosing every detail: alerting the insurer to an area where it should ask further questions. The Act expressly permits signposting and recognises that complete information is not always practical.
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About Apex Insurance Brokers Ltd
Apex Insurance Brokers Ltd is a Bristol-based insurance broker authorised and regulated by the Financial Conduct Authority (firm reference number 724952). The company is registered in England and Wales under Companies House number 07014570. Contact: info@apexinsurancebrokers.co.uk | 0117 325 0027.
Last reviewed: May 2026 by Apex Insurance Brokers Ltd.
Important: this article is general information, not advice on your specific circumstances. For advice on PI insurance for your firm, contact us on 0117 325 0027 or info@apexinsurancebrokers.co.uk.