The duty of fair presentation: getting your PI proposal right

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Published 2026-08-10

A professional indemnity policy is only as reliable as the information it was built on. The proposal form, the renewal questionnaire, the covering note to your broker — in the eyes of the law these are not administrative box-ticking. They are the presentation of risk on which an insurer decides whether to cover you, on what terms, and at what price. Since 12 August 2016 that presentation has been governed by the Insurance Act 2015, and the standard it sets is called the duty of fair presentation.

What the Insurance Act 2015 changed

Before the Act, business insurance was governed by principles that traced back to the Marine Insurance Act 1906. Under that older regime, if you failed to disclose a material fact — even innocently — an insurer could avoid the policy entirely, treating it as though it had never existed and refusing every claim. The remedy was all-or-nothing, and it often fell hardest on honest policyholders.

The Insurance Act 2015, which came into force on 12 August 2016 for business (non-consumer) insurance, rebalanced this. It replaced the old duty of disclosure with a clearer duty of fair presentation. It introduced a graduated set of remedies, so that an innocent mistake no longer automatically wipes out cover. It abolished “basis of the contract” clauses, which used to turn every answer on a proposal form into a strict warranty. And it reformed the law on warranties, so that a breach now suspends cover while it lasts rather than ending the policy for good.

Professional indemnity insurance is business insurance, so the 2015 Act applies to it. Insurance bought by individuals as consumers is dealt with separately, under the Consumer Insurance (Disclosure and Representations) Act 2012.

What “fair presentation” actually requires

The Act sets three linked requirements. A fair presentation is one that discloses every material circumstance your firm knows or ought to know — or, failing full disclosure, gives the insurer enough information to put a prudent insurer on notice that it needs to ask more questions. It must make that disclosure in a way that is reasonably clear and accessible to a prudent insurer. And every material statement of fact must be substantially correct, with every statement of expectation or belief made in good faith.

A material circumstance is one that would influence the judgement of a prudent insurer in deciding whether to take the risk and on what terms. Your claims and complaints history, disciplinary or regulatory matters, an unusual or high-value instruction outside your normal expertise, a new service line, or a known issue that might give rise to a future claim — these are the kinds of things that are almost always material.

The “clear and accessible” requirement matters as much as the content. Burying a material fact deep in a large data pack, or scattering it across disconnected attachments, is not a fair presentation even if the fact is technically somewhere in the file. The test is whether a prudent insurer could reasonably be expected to find and understand it.

What your firm is deemed to know

You cannot fairly present what you do not know — so the Act defines knowledge. Your firm knows what is known to the people who run it (its senior management) and to the individuals responsible for arranging its insurance. It also ought to know whatever a reasonable search of the information available to it would reveal, including information held elsewhere in the business.

The practical implication is important: the person completing the proposal cannot simply answer from their own desk. Fair presentation calls for a reasonable internal search — asking partners and department heads about circumstances that might need to be notified, checking the complaints log, the claims record, and any correspondence with your regulator. A reasonable search is a genuine obligation, not a formality.

What happens if you get it wrong

The Act’s remedies depend on the nature of the breach. If the failure was deliberate or reckless, the insurer may avoid the contract, refuse all claims and keep the premium. That is the serious end of the scale.

If the breach was neither deliberate nor reckless — an honest mistake or oversight — the remedy is proportionate to what the insurer would have done had it received a fair presentation. If it would not have written the risk at all, it may still avoid the policy, but it must return the premium. If it would have imposed different terms, the policy is treated as though those terms had applied from the start. And if it would simply have charged a higher premium, the insurer may reduce the claim in proportion.

To illustrate that last point: if the insurer would have charged twice the premium had it known the full picture, it may pay only half of an otherwise valid claim. Those figures are used purely to show how the mechanism works — they are not a quoted rate. The graduated remedies are the default position. For business insurance an insurer can contract out of some of them, but only if it meets the Act’s transparency requirements and draws the disadvantageous term clearly to your attention. Reading that small print is exactly what a good broker is for.

A note for solicitors and other regulated firms

Some professions carry an extra layer of protection. Solicitors’ compulsory cover is written on the SRA’s Minimum Terms and Conditions, which are designed to protect clients as much as the firm. Under those terms an insurer generally cannot avoid the policy or refuse to meet a claim against the firm on the grounds of non-disclosure or misrepresentation — a client should not lose their protection because the firm mishandled its proposal. That protection is not a free pass, however: the insurer typically keeps the right to recover from the firm what it has been required to pay out. Similar client-protective structures exist in other regulated sectors. So “the minimum terms will cover it” is no reason to be careless on a proposal — the exposure simply shifts back onto the firm and its principals.

How to make a clean presentation

A few habits keep firms on the right side of the duty:

• Start early. A fair presentation needs a reasonable search, and a search takes time. Do not leave the proposal to the last afternoon before renewal.
• Involve the right people. Ask every partner or department head about circumstances that might give rise to a claim, and check your complaints, claims and regulator records.
• Notify known circumstances. If you are aware of something that could become a claim, notify it under the current policy before renewal — do not carry it silently into the new year.
• Be clear, not impenetrable. Present material information so an insurer can readily find and understand it. If in doubt, flag it expressly rather than hoping it is “in there somewhere”.
• Answer every question fully. A question asked is a signal that the insurer treats the topic as material.
• Keep a record. Note what you disclosed and when. If a dispute ever arises, your file is your best defence.

Frequently asked questions

Does the duty apply only at the start, or at renewal too?
Both. Each renewal is a new contract, so a fresh fair presentation is required every time. If you make a material change mid-term — taking on a new type of work, for example — you may need to disclose that as well.

What if I simply forgot something innocently?
An honest oversight is not treated as deliberate or reckless, so the all-or-nothing avoidance of the old law will generally not apply. But the insurer can still impose a proportionate remedy — different terms or a reduced payout — so innocent mistakes still carry consequences. The aim is to avoid them, not to rely on being forgiven.

Can my broker make the presentation for me?
Your broker prepares and presents the risk to insurers on your behalf and will guide you on what is material. But the underlying duty to disclose what your firm knows or ought to know sits with you. It is a partnership: you supply a complete and honest picture, and your broker frames and places it.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This article is general information, not advice on a specific policy.