Proposal form disclosure - HRB and cladding

Spoke 7 of the Apex Insurance Brokers Building Safety Act 2022 hub. Disclosure is the place where most PI claims become PI disputes. Get the proposal right and the rest of the cover is straightforward; get the proposal wrong and the cover may not respond when it matters.

Plain English summary

Section 3 of the Insurance Act 2015 ("IA 2015") imposes a duty of "fair presentation of the risk" on every commercial insured. The duty is positive — you must disclose every material circumstance that you know or ought to know, and you must do so in a manner that would be reasonably clear and accessible to a prudent insurer.

In the BSA 2022 era, the universe of "material circumstances" for a construction professional has expanded substantially. Insurers want to know about HRB project history, EWS1 sign-off history, cladding involvement, fire safety work, dutyholder appointments, supplier chains, internal competence frameworks, and any threatened or potential claims arising from any of the above.

Common disclosure omissions:

Forgotten old residential projects (especially from the 1990s and early 2000s).
EWS1 sign-offs treated as too "low-volume" to mention.
Sub-consultant fire engineering work treated as the sub-consultant's responsibility.
Investigative or feasibility reports on HRBs that did not lead to a substantive design appointment.
Circumstances arising from third-party investigative reports (e.g. a freeholder's PAS 9980 appraisal flagging your historical project).

An omission of any of these can give the insurer a remedy under sections 8 and Schedule 1 IA 2015 — including, in the case of deliberate or reckless breach, avoidance of the contract and forfeiture of premium.

This article walks through the duty, the case law, and a practical disclosure checklist.

The legal position

Section 3 IA 2015 — the duty in summary

Section 3 IA 2015 provides:

"(1) Before a contract of insurance is entered into, the insured must make to the insurer a fair presentation of the risk. (2) The duty imposed by subsection (1) is referred to in this Act as 'the duty of fair presentation'. (3) A fair presentation of the risk is one— (a) which makes the disclosure required by subsection (4), (b) which makes that disclosure in a manner which would be reasonably clear and accessible to a prudent insurer, and (c) in which every material representation as to a matter of fact is substantially correct, and every material representation as to a matter of expectation or belief is made in good faith. (4) The disclosure required is as follows, except as provided in subsection (5)— (a) disclosure of every material circumstance which the insured knows or ought to know, or (b) failing that, disclosure which gives the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purpose of revealing those material circumstances."

What is "material"?

Section 7(3) IA 2015: a circumstance or representation is material "if it would influence the judgment of a prudent insurer in determining whether to take the risk and, if so, on what terms".

The test is about a hypothetical prudent insurer, not the actual underwriter. It is also a relatively low threshold: "influence the judgment" is broader than "decisively determine".

What does the insured "know" or "ought to know"?

Section 4 IA 2015 deals with knowledge. The insured "knows" what is known to:

The insured's senior management.
Individuals responsible for the insured's insurance.
Other persons whose knowledge is attributed to the insured by general law.

The insured "ought to know" what should reasonably have been revealed by a reasonable search of information available to the insured. The "reasonable search" point is critical for construction professionals: an undocumented file from 1998 is not necessarily off the hook.

Remedies for breach — section 8 and Schedule 1

Schedule 1 IA 2015 sets out the insurer's remedies for breach of the duty:

Deliberate or reckless breach: avoidance of contract from inception; refusal of all claims; retention of premium.
Neither deliberate nor reckless breach: proportionate remedies. If the insurer would not have entered into the contract at all, avoidance with return of premium. If the insurer would have entered on different terms, the contract is treated as if it had been entered on those terms — including by application of additional exclusions, higher excess, or proportionate reduction in claim payment.

The relevant case law

The leading authority on section 3 is Berkshire Assets (West London) Ltd v AXA Insurance UK plc [2021] EWHC 2689 (Comm), in which Cockerill J avoided a property cover for non-disclosure of a director's criminal conviction. Berkshire Assets established that the IA 2015 duty bites with real consequence, even where the non-disclosure relates to information the proposer thought was tangential.

For construction PI specifically, the developing case law focuses on the breadth of the duty in long-tail product lines. Insurers have become more willing to take points on disclosure where retrospective BSA exposure is at issue. The Court has shown sympathy for insurers facing claims arising from undisclosed historical work.

The "presumption of knowledge" trap

Section 5(2) IA 2015 imputes to the insurer the knowledge of an underwriter who is "an agent of the insurer for the purpose of the proposed contract". This is a narrow gateway and does not assist the policyholder who has chosen to leave a material circumstance out of the proposal in the hope that the underwriter "would have asked if they cared".

What insurers want disclosed in the BSA context

A comprehensive disclosure framework for a construction professional with any potential BSA 2022 exposure should cover all of the following categories. Treat this as the minimum, not the maximum.

Project history

All residential projects (new build, refurbishment, conversion) carried out by the practice or any predecessor going back at least 15 years and, ideally, 30 years.
For each project: address, year of practical completion, role of the practice, scope of services, project value or fee value, identity of the developer / client.
Subdivision by building height: under 11m, 11–18m, 18m+, and HRB status under the BSA 2022 definition.
Identification of any project where the practice held a Principal Designer or Principal Contractor role under the BSA dutyholder regime (in force from 1 October 2023).

Fire safety exposure

Any project where the practice provided fire safety advice, fire engineering, fire strategy or fire stopping design — whether as the primary discipline or as part of a wider scope.
Any sub-consultant fire engineering arrangements (with disclosure of the sub-consultant's identity, PI position and the scope of the sub-engagement).
Any in-house fire engineering capability and the qualifications of the responsible individuals.

EWS1 sign-off

Every EWS1 form ever issued by any director, employee or consultant of the practice.
For each: building, year, rating issued, methodology (PAS 9980 vs. earlier), version of EWS1 form used.
Any subsequent revision or withdrawal of any EWS1.

Cladding exposure

Any project where the practice was involved in the design, specification, installation or assessment of an external wall system on a residential building over 11 metres.
Any cladding remediation design or contracting work currently in progress or in the previous 10 years.
Any involvement (even at investigative stage) in a building that has subsequently become subject to a Remediation Order, Remediation Contribution Order, BSF / CSS funding application, or developer pledge remediation scheme.

BSA-specific roles

Every project on which the practice has held a statutory Principal Designer or Principal Contractor role under Part 2A Building Regulations 2010 (in force from 1 October 2023).
The competence framework operated by the practice in respect of those appointments.
Any project on which the practice or any associate has held an Accountable Person or Principal Accountable Person role under Part 4 BSA 2022.

Claims, circumstances, regulatory matters

Every notification, claim or circumstance made or received in the past 10 years, with status and outcome.
Every regulatory enquiry, investigation or proceedings (HSE, BSR, RIBA, IStructE, RICS, etc.) in the past 10 years.
Any pending or threatened section 1 DPA 1972 claim, contribution claim, RCO application or related matter.
Any third-party investigative report (e.g. PAS 9980 appraisal commissioned by a freeholder) where the practice is identified as an original consultant or contractor.

Internal governance

The practice's BSA 2022 compliance framework documentation.
The practice's SKEB / competence framework.
The practice's design / construction QA procedures.
The practice's record-retention policies for historical project documents.

Forward-looking work

The expected mix of work in the next 12 months by exposure category.
Any new BSA-related appointments confirmed or in negotiation.

Common disclosure omissions and their consequences

Forgotten 1990s residential projects

The retrospective section 135 limitation now reaches back 30 years. A 1996 residential project that the current managing director joined the practice "after" is still relevant; the practice (as a continuing legal person, or as a successor by merger) carries the liability.

Consequence of omission: fair-presentation breach. If a claim emerges from the forgotten project, the insurer may decline coverage on the grounds that, had the project been disclosed, terms would have differed.

EWS1 treated as a "small" line of work

"We only did three EWS1s in 2020" is not a defence to non-disclosure. EWS1 is a material exposure in the current market and every single sign-off is potentially relevant.

Consequence of omission: the insurer may invoke a partial reduction in indemnity or, in cases where the non-disclosure was deliberate or reckless, avoidance.

"It was sub-consultant work"

If your practice was the lead consultant on a project where the fire engineering scope was carried out by a sub-consultant, the practice has potential liability as the head of the design chain. Disclosure of the project — and the arrangement with the sub-consultant — is required.

Consequence of omission: the contract structure does not insulate the lead consultant from disclosure obligations; the omission is treated as a disclosure failure.

Investigative / feasibility reports

A short feasibility study or investigative report on an HRB is potentially as much exposure as a full design appointment — particularly if the report contains recommendations or opinions relied upon by the client.

Consequence of omission: if the report is later cited in a remediation claim or RCO application, the insurer may take the disclosure point.

Third-party reports identifying the practice

A freeholder's PAS 9980 appraisal that identifies your practice as the original designer of a now-suspect external wall system is a circumstance for the purposes of the policy's "circumstances" clause and for the IA 2015 disclosure duty. Receipt of the report (even informally, even from a third party) should trigger notification and, at the next renewal, disclosure.

Consequence of omission: a known circumstance not disclosed is one of the most exposed forms of disclosure failure. The insurer's remedy is potentially severe.

The disclosure checklist

A condensed practical checklist. Use this in conjunction with the longer "what insurers want disclosed" section above.

#	Item	Source data
1	Full residential project schedule, 15+ years (ideally 30)	Practice project register
2	HRB / over-18m / over-11m project breakdown	Project schedule, building height records
3	Principal Designer / Principal Contractor appointments	Appointment letters; Gateway 2 submissions
4	EWS1 sign-off log	Surveyor records; lender correspondence
5	Cladding involvement schedule	Project files; site records
6	Fire safety / fire engineering work schedule	Project scopes; sub-consultant arrangements
7	Accountable Person / Part 4 roles	Corporate group records
8	SKEB / competence framework	Internal HR / QA records
9	QA process documentation	Internal management system
10	Record retention policy	Internal management system
11	10-year claims / circumstances / regulatory matters log	Insurance broker records; legal records
12	Pending / threatened DPA / RCO / Remediation Order matters	Legal correspondence
13	Third-party investigative reports identifying the practice	Correspondence with freeholders / developers
14	Forward-looking 12-month work mix	Pipeline / business development records
15	Sub-consultant insurance verification	Sub-consultant PI certificates

A practice that can present these 15 items as a clean documented pack at proposal stage materially improves its underwriting outcome.

Worked scenario

Facts: An architectural practice (15 directors, 100 staff) renewed its PI in 2025. The proposal disclosed all current and historical residential projects since 2010, all EWS1 work, and all HRB projects. It did not disclose two pre-2010 residential projects (1998 and 2003) that the current generation of directors had no knowledge of.

In 2026, a Remediation Contribution Order is made in respect of the 1998 project — a 13-storey residential block. The developer's parent company pays, and its insurer pursues contribution from the practice. The practice notifies its PI insurer.

The PI insurer investigates. It discovers, through company-records research, that the practice was the original architect on the 1998 building. The 1998 project was not disclosed in the proposal.

Issues:

Was the 1998 project a "material circumstance" within section 7 IA 2015?
Did the practice "know" or "ought to know" of the project?
Was the non-disclosure deliberate or reckless?
What remedy does the insurer have?

Likely analysis (illustrative):

The 1998 project was material. The retrospective extension of DPA 1972 limitation under section 135 BSA 2022 makes any pre-2022 residential project material to a prudent insurer.
The practice "ought to have known" of the project — a reasonable search of practice records (whether digital, paper or insurance broker records) would have revealed it. The fact that the current directors did not personally know is not the test.
Whether the non-disclosure was deliberate or reckless depends on the facts. If the practice had digital project records that obviously included the 1998 project, recklessness is plausible. If the records were genuinely lost or transferred, the breach may not be deliberate or reckless.
The remedy is proportionate. If the insurer would have written the risk on different terms (additional excess, sub-limit, etc.), the contract is treated as if those terms applied — meaning the indemnity available for the 1998 claim is reduced or restricted.

The point: the disclosure breach can have a material financial consequence even on a claim entirely unrelated to the breach's subject matter. A proportionate remedy can mean a 30% or 50% reduction in the indemnity available — for a multi-million-pound RCO claim, that is real money.

Sector-specific practical takeaways

Architects: invest in a permanent practice project register. Capture every project, every role, every key date. Update annually. Use this as the foundation for every proposal.

Engineers: the same applies, with particular focus on structural fire engineering, cladding fixings, and any work that touches the external wall system.

Fire engineers: disclosure is the single most important risk-management discipline. The market is small and the underwriters compare notes.

Surveyors: EWS1 disclosure is non-negotiable. Build the log; keep it current; share it freely with the broker.

D&C contractors: the project history requirement extends across both PI and PL. Coordinate the disclosure pack between the two policies.

Frequently asked questions

1. Do I have to disclose every project from the 1990s? You must disclose every material circumstance. For a residential project from the 1990s, materiality is now almost always present because of section 135. If you do not have records, document the lack of records — that itself is a material fact.

2. Is a "no claims" history enough disclosure? No. Disclosure is positive: you must volunteer material circumstances, not merely answer specific questions. A clean claims history does not discharge the broader duty.

3. What if the insurer asks a closed question that doesn't capture the issue? You still have to volunteer the material circumstance under section 3(4). The closed question does not narrow the duty (subject to section 3(5)'s "data dump" prohibition — you do not have to volunteer immaterial information).

4. What is the "data dump" prohibition? Section 3(5) provides that disclosure is not "fair" if it consists of unstructured presentation of large volumes of information that obscure material circumstances. The duty is to present material circumstances in a manner that would be reasonably clear and accessible to a prudent insurer.

5. Can the broker save me from a disclosure mistake? The broker has duties of care to the client and to the insurer. A competent broker can help structure the disclosure but cannot fix a deliberate or reckless omission by the insured.

6. What is the difference between a "circumstance" and a "claim"? A "claim" is a demand for money. A "circumstance" is a fact or matter that could give rise to a claim. The policy's "circumstances" clause is the trigger for in-policy notification; the IA 2015 duty covers disclosure at proposal stage. They overlap and are both important.

7. What if I missed something — should I tell my insurer now? Yes. Voluntary correction of a disclosure failure is the right step. It is also a factor in any proportionate-remedy analysis: the insurer's remedy is calibrated by what it would have done if properly informed, and prompt correction may mitigate the position.

8. Are oral disclosures sufficient? Disclosures are best made in writing. An oral disclosure may discharge the duty in principle, but the evidential problems are obvious. Get it in writing.

9. Do I have to disclose information that the insurer can find from public sources? Section 3(5) IA 2015 provides that the duty does not require disclosure of information that the insurer "knows" or "ought to know" or "is presumed to know". Public-domain information may fall within "presumed to know" — but the boundary is not always clear, and relying on it is risky.

10. What about the broker's market disclosure? The broker's submission to the market is, in legal effect, your submission. Make sure you have read and approved the disclosure pack before it is sent to insurers.

Sources

Statute — Insurance Act 2015 c.4, ss.3, 4, 5, 7, 8, Sch.1; Building Safety Act 2022 c.30, s.135.

Case law — Berkshire Assets (West London) Ltd v AXA Insurance UK plc [2021] EWHC 2689 (Comm); Young v Royal & Sun Alliance plc [2019] CSOH 32 (Scotland); the developing IA 2015 case law generally.

Guidance — Lloyd's Market Association: Insurance Act 2015 guidance for underwriters and brokers; BIBA technical briefings.

Where this fits

Disclaimer

This is legal and insurance commentary, not advice. The Building Safety Act 2022 regime is technical and fact-sensitive — consult specialist counsel and your broker on your specific position. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FRN 724952.