Insurance Act 2015 section 8: what counts as a qualifying breach

Reviewed by Matthew Bartlett, Director · Last reviewed 2026-06-30

What section 8 says

Section 8 of the Insurance Act 2015 sets the gateway between a defective presentation of the risk and any remedy for the insurer. A breach of the duty of fair presentation under section 3 only becomes legally significant if it is a qualifying breach. A breach that does not qualify gives the insurer no remedy under the Act; one that does opens the door either to avoidance under section 8(5), or to the proportionate remedies in section 9.

The two-limb test

Section 8(1) sets a two-part test. A breach is qualifying where both limbs are satisfied:

• Breach. The insured has breached the section 3 duty, that is, has failed to make a fair presentation of the risk. The relevant knowledge is set out in section 7 and includes the knowledge of senior management and of those responsible for arranging the insurance.
• Inducement. But for the breach, the insurer would either not have entered into the contract, or would have entered into it only on different terms. The burden of proving inducement rests on the insurer.

Both limbs must be met. Materiality alone is not enough; the insurer must show that the actual underwriter would have made a different decision had the presentation been fair.

Berkshire Assets v AXA

The leading post-Act decision on inducement is Berkshire Assets (West London) Ltd v AXA Insurance UK plc [2021] EWHC 2887 (Comm). The court accepted contemporaneous underwriter evidence that AXA would not have written the risk on the same terms had the relevant matters been disclosed, and that was sufficient to satisfy section 8(1)(b). Underwriting files, referral records, and the testimony of the individual underwriter who took the risk are the practical evidence that decides the inducement question. An insurer cannot rely on a generic statement that it would have priced differently; it must show what it would actually have done.

Deliberate or reckless, or neither

Section 8(5) draws the line that controls the remedy. A qualifying breach is either:

• Deliberate or reckless — the insured knew that it was in breach of the duty, or did not care whether it was. The burden of proving deliberate or reckless conduct lies on the insurer (section 8(6)). Where this is shown, the remedies in Schedule 1 paragraph 2 apply: the insurer may avoid the contract, refuse all claims, and need not return the premium except so far as it would be unfair to retain it.
• Neither deliberate nor reckless — every other qualifying breach. The proportionate remedies in section 9 apply.

Section 9 in outline

Where the breach is neither deliberate nor reckless, the remedy is calibrated to what the insurer would have done on a fair presentation:

• If the insurer would not have entered into the contract on any terms, it may avoid the contract and refuse all claims, but must return the premium.
• If the insurer would have entered into the contract on different terms (other than premium), the contract is treated as if those terms had applied from the outset.
• If the insurer would have charged a higher premium, the claim is reduced proportionately, at the ratio of the premium actually charged to the premium that would have been charged.

A separate wiki entry covers section 9 in detail.

Worked example (hypothetical)

Worked example. An architects firm renews its professional indemnity cover and does not disclose a £150,000 client complaint received six months earlier. The complaint is a circumstance a prudent insurer would want to know about and so falls within section 3. The insurer's underwriter, on later seeing the complaint, says the risk would still have been written but at a premium 15% higher than that actually charged. There is no evidence the firm knew it ought to disclose the matter; the omission was careless rather than deliberate.

The breach is qualifying because both limbs are satisfied: there was a section 3 breach, and the insurer would have entered the contract on different terms. It is not deliberate or reckless, so section 9 applies. The proportionate remedy is to reduce any claim payment at the ratio of premium charged to premium that would have been charged, or alternatively to apply the additional terms retroactively. The insurer cannot avoid the contract on these facts.

Reading on

For the underlying duty, see section 3 fair presentation. For whose knowledge counts, see section 7. For sector context, Apex's pillar guides on architects PI, solicitors PI, accountants PI and surveyors PI set out how disclosure works in practice at renewal.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952.