Reasonable search (Insurance Act 2015, s.4)

Category: Disclosure and presentation · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~4 min read

Where the requirement sits

Section 3 of the Insurance Act 2015 imposes the duty of fair presentation, which requires disclosure of every material circumstance the insured knows or ought to know. Section 4 then defines knowledge. For an insured that is not an individual, section 4(3) provides that the insured knows only what is known to individuals who are part of the insured’s senior management, or who are responsible for the insured’s insurance. Section 4(6) supplies the “ought to know” limb: an insured ought to know what should reasonably have been revealed by a reasonable search of information available to it.

Section 4(8) fills in the definitions. “Senior management” means those individuals who play significant roles in the making of decisions about how the insured’s activities are to be managed or organised. A person is responsible for the insured’s insurance if they participate on behalf of the insured in the process of procuring its insurance, whether or not that is their main role and whether or not they are an employee.

What the search covers

The statutory phrase is “information available to the insured”, and it is deliberately wider than information held by the board. It reaches across the organisation, and it expressly includes information held by another person — for example an agent or someone insured under the contract — where that information is available to the insured. It is not limited to written records: the section says the search may be conducted by making enquiries or by any other means, so asking people is a legitimate and often necessary method.

What the section does not do is impose a fixed scope. “Reasonable” is calibrated to the size and complexity of the business, the nature of the cover, and the materiality of what is being looked for. A search proportionate for a twelve-person consultancy would not be adequate for a group with multiple trading subsidiaries and overseas branches.

Who has to be asked

In practice a defensible search reaches at least: the directors and senior managers whose knowledge is attributed by section 4(3); the people who actually run the operations being insured, including site, branch and departmental heads; whoever handles complaints and disputes, because notifiable circumstances usually surface there first; finance, for anything affecting solvency, financing or material contracts; HR, for employment claims and grievances; health and safety, for incidents and enforcement contact; and IT or information governance, for cyber and data incidents.

It should also reach outward where information is genuinely available: to subsidiaries and joint ventures being insured under the same contract, to outsourced providers whose acts fall within the cover, and to any professional adviser holding relevant information. Where information is held by someone insured under the contract, the section contemplates that it may be caught even though the head office never saw it.

Two categories are commonly missed. The first is the notifiable circumstance that a fee earner or project lead has recognised but not escalated. The second is knowledge held by someone who has left, or in a mailbox nobody now reads. Neither is answered by asking the board.

What the search should be looking for

The search is for material circumstances — matters that would influence the judgement of a prudent insurer in deciding whether to take the risk and on what terms. In most commercial placements that means: claims, circumstances, complaints and disputes, whether or not notified; changes in activities, disciplines, territories or client type; contractual liabilities assumed, including collateral warranties, hold-harmless and uncapped indemnities; significant changes in turnover, headcount, ownership or structure; regulatory contact, investigations or enforcement; incidents that did not result in a claim but could have; and previous insurance history including declinatures and special terms.

It is worth separating “we have no claims” from “we have made no notifications”. They are different statements, and only one of them survives a search.

Evidencing it

The insured’s protection is evidential. If a circumstance later emerges that was not disclosed, the question will be whether a reasonable search would have revealed it — and the only practical way to answer that is a contemporaneous record. A defensible file usually contains: a written description of the search actually carried out, including who was asked and what they were asked; dated copies of the enquiry, whether an email, a form or a meeting note; the responses, including nil returns, which are as important as positive ones; and a note of any area deliberately excluded from the search and why.

The record should be made at the time, kept with the placing file, and repeated at each renewal rather than rolled forward. A search evidenced from last year does not evidence this year’s knowledge. Where a broker runs the process, the file should still show that the insured directed and verified it — the duty is the insured’s, not the broker’s.

The consequences of getting it wrong

Failure to make a fair presentation triggers the proportionate remedies in Schedule 1. Where the breach was deliberate or reckless, the insurer may avoid the contract and keep the premium. Where it was neither, the remedy depends on what the insurer would have done: avoidance with return of premium if it would not have written the risk at all; the contract treated as containing the different terms it would have imposed; or a proportionate reduction of the claim if it would have charged a higher premium. See fair presentation for how those remedies work.

The reasonable search is therefore not paperwork for its own sake. It is the mechanism by which an insured converts “we did not know” into a defensible position, and it is the first thing an insurer’s coverage lawyer will ask to see.

Frequently asked questions

What does section 4(6) of the Insurance Act 2015 actually say?

That an insured ought to know what should reasonably have been revealed by a reasonable search of information available to the insured, whether the search is conducted by making enquiries or by any other means. It defines the “ought to know” limb of the duty of fair presentation.

Whose knowledge counts for a company?

Under section 4(3), the knowledge of individuals who are part of the insured's senior management or who are responsible for the insured's insurance. Section 4(8) defines senior management as those playing significant roles in decisions about how the insured's activities are managed or organised, and treats anyone participating in procuring the insurance as responsible for it.

How far does a reasonable search have to go?

There is no fixed scope. It is calibrated to the size and complexity of the business, the nature of the cover, and how material the information is. It expressly extends to information held by others where that information is available to the insured, including agents and parties insured under the same contract.

How should a business evidence its search?

With a contemporaneous record made at the time of the placement: who was asked, what they were asked, the dated enquiry itself, all responses including nil returns, and a note of anything deliberately left out and why. It should be repeated at each renewal rather than rolled forward.

References

• Insurance Act 2015, section 4 (knowledge of insured), legislation.gov.uk

Related entries

• Fair presentation
• Insurance act 2015 fair presentation deep dive
• Fair presentation of the risk
• Material circumstance
• Pi non disclosure vs misrepresentation explained

This entry is part of the Apex Insurance Wiki. It is general insurance information, not legal advice, and states the position as at August 2026. Last reviewed 2026-08-22. Next review: 2027-02-22. Always read the policy wording and take advice on your own facts.

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