What is an innocent non-disclosure clause?
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
When you buy business insurance, you have a legal duty to give the insurer a fair picture of the risk before the policy starts. Get that wrong — even honestly — and the insurer may have grounds to challenge cover when you least expect it: at claim time. An innocent non-disclosure clause is one of the safeguards that stops an honest slip from wiping out your protection. This page explains what the clause does, how it sits alongside UK law, and why it matters on your professional indemnity (PI) and other commercial policies.
The duty behind the clause
For commercial insurance, the Insurance Act 2015 replaced the old, harsh regime with a duty of fair presentation. Before cover incepts you must disclose every material circumstance you know or ought to know, or at least give the insurer enough information to prompt sensible questions. A circumstance is "material" if it would influence a prudent underwriter's judgement on whether to take the risk and on what terms.
The problem is that people running busy firms are not perfect record-keepers. An old matter is forgotten. A subsidiary's turnover is misstated. A past claim is described loosely. None of this is dishonest — but under the strict letter of the law it can still be a breach of the duty, and the insurer's remedy depends on how serious the breach was.
What the Insurance Act 2015 already gives you
The Act itself softened the consequences of an honest breach. It draws a clear line between two situations:
| Type of breach | Insurer's remedy |
|---|---|
| Deliberate or reckless | The insurer may avoid the policy, refuse all claims and keep the premium. |
| Neither deliberate nor reckless (an honest mistake) | A proportionate remedy applies. If the insurer would have declined the risk entirely, it can avoid but must return the premium. If it would have charged more or imposed different terms, the claim is scaled down or the terms are treated as if they had applied. |
So the Act already means an honest omission does not automatically void cover in the way it once did. But the proportionate remedy can still reduce or, in some cases, end cover — and that is where the innocent non-disclosure clause goes further.
What the innocent non-disclosure clause adds
An innocent non-disclosure clause is a contractual promise in the policy wording, over and above the statutory position. In broad terms the insurer agrees that it will not exercise its right to avoid the policy where a non-disclosure or misrepresentation was innocent — that is, free of any fraudulent or dishonest intent on your part.
The practical effect is to give the honest policyholder more certainty than the bare Act provides. Common features you may see include:
- A statement that the insurer will not avoid, or reject a claim, on grounds of innocent non-disclosure or misrepresentation.
- A requirement that you tell the insurer as soon as you become aware of the error, and pay any additional premium the insurer reasonably requires.
- Wording that the protection does not apply where the non-disclosure was deliberate, reckless or fraudulent.
- Sometimes, confirmation that the knowledge of one insured person is not automatically attributed to every other insured under the policy (an "innocent insured" or non-imputation point often seen on management liability wordings).
The exact wording varies between insurers, and the clause never protects dishonesty. It is a safety net for the genuine mistake, not a licence to be careless with your presentation.
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Get a PI quote →Why this matters for professional indemnity
PI insurance is written on the basis of what you tell the insurer about your firm, its work, its history and its claims record. A PI claim can surface years after the work was done, and it is precisely at that point that any weakness in the original presentation gets scrutinised. An innocent non-disclosure clause reduces the risk that an honest gap in the proposal — a forgotten complaint, an understated fee income figure — becomes the reason a valid claim is challenged.
It does not remove your duty. The single most reliable protection is still a careful, honest and reasonably diligent presentation: check the numbers, ask colleagues about past matters, and disclose anything you are unsure about rather than leaving it out. The clause is there for the residual human error that survives a genuine effort to get it right.
Consumers versus commercial buyers
If you are buying insurance as a consumer rather than for a business, a different statute applies: the Consumer Insurance (Disclosure and Representations) Act 2012. Under that Act you no longer have to volunteer information; instead you must take reasonable care not to make a misrepresentation in answer to the insurer's questions. Honest and reasonable answers are protected, and the insurer's remedies for a careless (as opposed to deliberate or reckless) misrepresentation are again proportionate. Business PI, however, sits under the Insurance Act 2015 and the duty of fair presentation described above.
How to make the most of the protection
- Keep a note of what you disclosed and when — your proposal form and any covering correspondence.
- Update your insurer promptly if you realise something was missed or misstated; many clauses require it.
- Read the wording. Check whether your policy carries an innocent non-disclosure clause and understand its conditions.
- Ask your broker to explain how the clause interacts with the rest of the policy, including any warranties and conditions precedent.
Not sure whether your current policy offers this protection? Ask us to review your cover and we will tell you plainly.
Common questions
Does an innocent non-disclosure clause protect me if I lied on the proposal?
No. The clause only covers innocent, non-fraudulent errors. Deliberate or reckless misrepresentation falls outside it, and the insurer keeps its right to avoid the policy and retain the premium under the Insurance Act 2015.
Is this clause a legal requirement, or an optional extra?
It is a contractual enhancement, not a statutory right. The Insurance Act 2015 already provides proportionate remedies for honest breaches; the clause goes further by having the insurer agree not to avoid for innocent non-disclosure. Whether your policy includes one depends on the insurer and wording.
Do I still need to disclose everything if my policy has this clause?
Yes. Your duty of fair presentation continues to apply in full. The clause is a safety net for honest slips, not a reason to be less thorough. Careful disclosure remains your best protection at claim time.
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.