Category: Insurance case law · Reviewed by Amy Price, Account Executive · Last reviewed June 2026
Court of Appeal decision establishing that clear words are required to convert an answer in a proposal form into a continuing warranty, and that, in case of ambiguity, statements in proposal forms will be construed as relating only to the position at the date of the proposal.
Mr Hussain owned commercial premises which he insured against fire and other risks. The proposal form completed at inception contained, among other questions, a question about whether the premises were fitted with a burglar alarm. Mr Hussain answered in the affirmative, indicating that an intruder alarm was installed at the property. The proposal form, in the conventional manner of the time, incorporated a basis-of-the-contract clause which purported to make the answers given the basis of the contract and thereby to convert them into warranties.
Some time after the policy was effected, fire damaged the premises. When Mr Hussain claimed under the policy, the insurers declined indemnity. They contended that his answer about the burglar alarm should be construed as a continuing warranty — a promise that an alarm would be installed and operative throughout the currency of the policy — and that he was in breach of that warranty because at some point during the policy period the alarm had ceased to be in working order. Breach of warranty, on the law as it then stood (and as later confirmed in Bank of Nova Scotia v Hellenic Mutual War Risks Association (The Good Luck)), automatically discharged the insurers from liability, irrespective of any causal connection between the breach and the loss.
The proposal form did not in terms ask whether the alarm would be maintained, kept in efficient working order, or set whenever the premises were unoccupied. It asked, in substance, only whether such an alarm was installed. The dispute therefore turned on the proper construction of that answer in the context of the proposal form and the policy.
The central issue was whether the assured’s answer in the proposal form, considered together with the basis-of-the-contract clause, amounted to a continuing warranty that the burglar alarm would remain installed and operative throughout the policy period, or merely to a statement about the position at the date of the proposal. If the former, breach during the policy period would automatically discharge the insurers; if the latter, the assured would not be in breach merely because the alarm subsequently fell into disrepair.
A subsidiary issue was the broader question of when, in the absence of express continuing-warranty language, the courts will construe an answer in a proposal form as a continuing rather than a present warranty.
The Court of Appeal held in favour of the assured. The answer about the burglar alarm was not a continuing warranty. It was, on its proper construction, a statement about the position at the date of the proposal: there was an alarm installed. It did not amount to a promise that the alarm would continue to be installed, maintained, or operated throughout the policy period.
The Court emphasised the well-established principle that warranties — and especially continuing warranties whose breach has the draconian effect of discharging the insurer — should be created only by clear language. Where an insurer wishes to impose a continuing obligation on the assured (for example, that an alarm shall be kept in efficient working order and set whenever the premises are unoccupied), it must use words which clearly impose that ongoing obligation. The assured cannot be taken to have given an ongoing promise unless the wording of the question, read fairly and in context, plainly invites one.
The basis-of-the-contract clause did not assist the insurers. While such a clause could elevate the answer into a warranty of its truth as at the date of the proposal, it did not in itself convert a one-off statement into a continuing obligation extending across the policy period.
In the construction of proposal forms, clear language is required to convert an answer to a question about the existence of a feature (such as a burglar alarm) into a continuing warranty. In the absence of such language, the answer will be construed as relating only to the position at the date of the proposal. Continuing warranties, being onerous obligations whose breach has severe consequences, will not be inferred. Ambiguity will be resolved against the insurer who drafted the proposal form and seeks to rely on the warranty.
Hussain v Brown is a leading authority on the construction of warranties created by proposal forms and on the distinction between present and continuing warranties. It is regularly cited for the propositions that (i) warranties must be created by clear language, (ii) ambiguous wording in a proposal form will not be construed as a continuing warranty, and (iii) statements in proposal forms relate, in the absence of clear continuing-warranty language, only to the position at the date of the proposal. The decision is part of a line of authority — including Provincial Insurance v Morgan and later HIH v AXA — in which the courts adopted a restrictive approach to the identification and construction of warranties.
The case retains its importance under the modern law. The Insurance Act 2015 abolishes basis-of-the-contract clauses in non-consumer insurance (section 9) and, by section 10, replaces automatic discharge for breach of warranty with suspension of cover during the period of breach. Section 11 prevents reliance on a breach which would not have made any difference to the risk of the loss. However, the question whether a term is a warranty in the first place — and, if so, whether it is a present or continuing warranty — still matters: it affects whether the section 10 suspension regime applies at all, and what its temporal scope is. The principles of construction set out in Hussain v Brown therefore remain directly relevant.
For brokers and underwriters, the case is a longstanding reminder that proposal-form questions must be drafted carefully if a continuing obligation is to be created, and that ambiguity will be resolved against the insurer.
By Matt Bartlett, Director, on 2026-06-06. Next review: 2026-12-06.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-06. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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