Utmost Good Faith (Uberrimae Fidei) in Insurance
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
What "utmost good faith" actually means
Most contracts operate on caveat emptor — buyer beware. Insurance is different. When you buy cover, the insurer usually cannot inspect the risk the way a shopper inspects goods; it relies on what you tell it. To balance that, the law imposes a higher standard: uberrimae fidei, Latin for "of the utmost good faith". Both parties owe honesty, but in practice the obligation weighs most heavily on the person seeking cover, because they hold the facts.
The idea was codified for marine insurance in the Marine Insurance Act 1906 and became a cornerstone of English insurance law generally. Under that older regime, if you failed to disclose a "material circumstance" — anything that would influence a prudent underwriter's judgement — the insurer could avoid the policy: treat it as if it had never existed, refuse every claim, and keep the premium. The breach did not have to be deliberate. An honest oversight could be enough.
Why the old rule was a problem for businesses
The all-or-nothing remedy produced harsh outcomes. A company could pay premiums for years, suffer a genuine loss, and then find the whole policy voided over an innocent slip on the proposal form that had nothing to do with the claim. It also left businesses guessing about how much to disclose, and about who inside the organisation counted as "knowing" a fact.
Parliament addressed the consumer side first, through the Consumer Insurance (Disclosure and Representations) Act 2012, which removed the volunteer-everything duty for individuals buying personal cover. Business insureds, however, still sat under the 1906 framework — until the Insurance Act 2015.
How the Insurance Act 2015 reshaped the duty
The Insurance Act 2015 came into force on 12 August 2016 and applies to non-consumer (commercial) insurance contracts. It did not abolish good faith — the contract remains one of the utmost good faith — but it changed how the duty is expressed and, crucially, what happens when it is breached.
Three changes matter most for a business buying cover:
- A duty of fair presentation replaces the old duty of disclosure. You must disclose every material circumstance you know or ought to know, or give the insurer enough information to prompt it to ask further questions. The presentation must be made in a reasonably clear and accessible way, and every material representation of fact must be substantially correct.
- "Knowledge" is defined. The business is treated as knowing what its senior management and the people responsible for arranging the insurance know, plus whatever a reasonable search of information available within the organisation would reveal.
- Remedies are now proportionate. Avoidance is no longer the automatic penalty. What the insurer can do depends on whether the breach was deliberate or reckless, and on what it would have done had you presented the risk fairly.
Arranging or renewing business cover? Start a fair presentation with Apex →
The remedies compared: before and after
The table below summarises how the same breach is treated under the old regime versus the Insurance Act 2015 framework for commercial insureds.
| Situation | Old regime (pre-2016) | Insurance Act 2015 |
|---|---|---|
| Deliberate or reckless breach | Policy avoided; claims refused; premium kept | Insurer may avoid the policy, refuse all claims and keep the premium |
| Careless or innocent breach — insurer would have declined cover | Policy avoided; premium generally returned | Insurer may avoid, but must return the premium |
| Careless breach — insurer would have used different terms | Policy could still be avoided entirely | Contract treated as if it included those terms |
| Careless breach — insurer would have charged more | Policy could still be avoided entirely | Claim reduced proportionately to the premium actually paid |
This proportionate approach means an honest mistake no longer automatically destroys the whole policy. The insurer is placed, as far as possible, in the position it would have been in had the risk been fairly presented.
What fair presentation looks like in practice
Meeting the duty is largely about process and evidence. Before you sign or renew a commercial policy, it helps to:
- Carry out a reasonable search across the business — not just the finance or facilities team — for anything that might affect the risk, such as claims history, changes in operations, subsidiaries, contracts or known circumstances that could lead to a claim.
- Present information clearly and in a structured way, so a busy underwriter is not left to hunt through a data dump. Burying a material fact in an unindexed appendix can itself breach the duty.
- Answer proposal questions accurately and honestly, and flag anything you are unsure about rather than leaving it out.
- Keep a record of what you disclosed and when, so you can evidence a fair presentation if a claim is ever queried.
A good broker is central to this. Part of our job at Apex is to help you identify what is material, frame the presentation properly, and make sure the risk reaches the insurer in a way that protects your right to claim.
Can the duty be changed by the policy?
The Insurance Act 2015 also introduced rules on "contracting out". An insurer can offer terms less favourable to a commercial insured than the Act's defaults, but only if it satisfies the transparency requirements — the disadvantageous term must be clear and unambiguous, and drawn to your attention before the contract is entered into. This is one reason to read a commercial wording carefully, or have it reviewed, rather than assuming the statutory position always applies.
Not sure your risk has been presented fairly — or whether your current cover would respond? We can review it and quote.
Get a PI quote →Common questions
Is utmost good faith still part of UK insurance law?
Yes. The insurance contract remains one of the utmost good faith. What the Insurance Act 2015 changed is that breaching the good-faith duty no longer, by itself, lets an insurer simply avoid a commercial policy. Instead the duty is expressed as fair presentation, with proportionate remedies for getting it wrong.
Does the duty apply to consumers as well as businesses?
The concepts overlap, but the rules differ. Individuals buying personal insurance fall under the Consumer Insurance (Disclosure and Representations) Act 2012, which asks them to take reasonable care not to make a misrepresentation. The Insurance Act 2015 duty of fair presentation applies to non-consumer, business insurance.
What happens if I innocently forget to mention something?
Under the 2015 Act, an innocent or careless breach no longer automatically voids the policy. The insurer applies a proportionate remedy based on what it would have done with the missing information — for example reducing a claim in line with the premium it would have charged.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.