Category: Insurance Act 2015 — claims provisions · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-11
Material disclosure at the claim stage is the insured’s continuing obligation, derived from express policy terms and the residual duty of good faith preserved by section 14 of the Insurance Act 2015, to provide truthful and material information when making and supporting a claim.
Category: Insurance Act 2015 — claims provisions Also known as: claims-stage disclosure, post-loss disclosure, duty of disclosure at claim Related concepts: Fraudulent claim, Section 12 Insurance Act 2015, Section 14 Insurance Act 2015 good faith, Conditions precedent
Material disclosure at the claim stage is the obligation, owed by an insured to its insurer when making and pursuing a claim, to provide accurate, complete and material information about the loss, the circumstances surrounding it, and any matters that might affect the insurer’s liability or the proper handling of the claim. The duty arises from a combination of sources: express policy terms requiring notification, cooperation and provision of information; the implied duty to act with reasonable care in providing information; the residual duty of good faith preserved (without the remedy of avoidance) by section 14 of the Insurance Act 2015; and the statutory remedies for fraudulent claims in section 12 of the 2015 Act. Unlike the pre-contractual duty of fair presentation under Part 2 of the 2015 Act, there is no overarching statutory codification of the claims-stage disclosure duty in the 2015 Act. Instead, the duty operates through the matrix of contractual provisions and common-law principles. The scope of “material” in this context typically extends to facts that would affect the insurer’s decision whether to admit liability, the quantum of any indemnity, the existence of other recoveries (subrogation, contribution), the position of co-insureds, the application of warranties or conditions precedent, and the existence of any fraud. The duty is reinforced by the rules on fraudulent claims, which mean that not only outright fabrication but also material non-disclosure or misrepresentation in the course of the claim can attract the section 12 remedies and trigger contractual forfeiture provisions.
The legal basis of material disclosure at claim is multi-layered. First, contractual provisions: most policies contain express terms requiring the insured to give notice of loss, to provide such information and documentation as the insurer reasonably requires, to cooperate with investigation, to refrain from prejudicing the insurer’s position, and to refrain from admitting liability without consent. These provisions are commonly framed as conditions precedent to liability, meaning that non-compliance defeats the claim irrespective of materiality (see Bankers Insurance Co Ltd v South [2003] EWHC 380 (QB) and J Kirkaldy & Sons Ltd v Walker [1999] 1 Lloyd’s Rep IR 410).
Second, the residual duty of good faith. Section 14 of the Insurance Act 2015 abolishes the remedy of avoidance for breach of the duty of utmost good faith but preserves the duty as a principle of interpretation. The duty continues to inform the construction of express notification and cooperation provisions and the conduct of the parties during the claim. The pre-2015 case law, such as Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd (The Star Sea) [2003] 1 AC 469, recognised a continuing duty of good faith at the claims stage but circumscribed its scope. Under the post-2015 framework, the duty remains as a yardstick of conduct but cannot itself defeat a claim through avoidance.
Third, the statutory remedies for fraudulent claims. Section 12 of the 2015 Act provides that, where a claim is fraudulent (in the sense outlined under the Fraudulent claim entry), the insurer is not liable to pay it, may recover sums paid, and may treat the contract as terminated. Material non-disclosure that crosses into dishonesty engages section 12.
Fourth, regulatory rules. ICOBS 8.1 requires authorised insurers to handle claims fairly and to give appropriate guidance to insureds. The Consumer Duty (PRIN 2A) requires firms to provide good outcomes throughout the customer journey. These rules indirectly shape the disclosure obligation by requiring insurers to be clear about what information they need and why, and by limiting their ability to rely on technical breaches of disclosure provisions where the insured is a consumer.
Case law on the operation of conditions precedent at the claim stage includes Bankers Insurance v South, Aspen Insurance UK Ltd v Pectel Ltd [2008] EWHC 2804 (Comm) and J Kirkaldy v Walker, each of which illustrates the strictness with which such conditions are construed and the importance of compliance.
In practice, the material disclosure obligation operates through the claims process at each stage. At the notification stage, the insured must provide prompt and accurate notification within the timescales specified in the policy. Late notification can defeat a claim if framed as a condition precedent, even without prejudice to the insurer. At the documentation stage, the insured must provide the information required by the insurer (claim forms, supporting evidence, financial records) accurately and completely. At the investigation stage, the insured must cooperate with loss adjusters, investigators and experts, providing access to premises, records and personnel. Throughout, the insured must refrain from making materially false statements and must correct any inaccuracies as soon as they become apparent.
Insurers will typically request a “statement of truth” or proof of loss with a claim form, signed by the insured and confirming the accuracy of the information provided. Misstatements in the proof of loss can found a fraudulent claim defence under section 12. Insurers may also seek interviews under caution if criminal proceedings are contemplated, with the procedural protections of PACE engaged.
The obligation also extends to material changes during the claim. If circumstances change (e.g. recovery of stolen property, new information about the cause of loss, the emergence of a third-party recovery), the insured should promptly inform the insurer. Failure to do so can amount to material non-disclosure or, in serious cases, fraud.
For brokers, the material disclosure obligation creates a parallel duty of care in negligence: a broker who fails to advise the client about the importance of accurate and complete claims-stage disclosure may be liable for any loss caused. The professional indemnity exposure of brokers in fraudulent claims cases is significant; brokers should ensure that their claims-handling protocols include client briefings on the importance of accurate disclosure and on the consequences of fraud.
For policyholders facing significant claims, particularly in commercial property, business interruption and liability, instructing experienced loss assessors or specialist insurance lawyers can ensure that the disclosure obligation is met without inadvertent breaches and that the claim is presented in the most favourable light consistent with truth and completeness.
The detailed operation of the material disclosure obligation varies by class of business. In motor insurance, the duty centres on the circumstances of the accident, the identity of drivers and witnesses, and the existence of any prior damage. In household insurance, the duty focuses on the cause of loss, the contents claimed and any previous losses. In commercial property, the duty is broader: declarations of values, business interruption financials, and information about subrogation potential. In professional indemnity and liability classes, the duty extends to the underlying third-party claim, the insured’s response to it, and any settlement discussions.
The treatment of conditions precedent to liability varies between policies. Some policies make notification a condition precedent on a strict basis (any failure defeats the claim); others provide for proportionate remedies (the insurer may reduce or refuse payment in proportion to the prejudice caused). Section 11 of the Insurance Act 2015 may assist insureds where the condition precedent is not relevant to the actual loss; if the breach could not have increased the risk of the loss that occurred, the insurer cannot rely on the breach to defeat the claim.
The application of the duty to consumer policyholders is moderated by the Consumer Duty and ICOBS. Insurers may not unreasonably reject a consumer claim and must give appropriate guidance to enable the consumer to make a claim. The FOS will apply a fair and reasonable standard that takes account of the consumer’s particular circumstances.
A commercial property policyholder suffers a fire. The policyholder notifies the insurer within the required 14-day period, completes the proof of loss form, and provides supporting documentation. Six months later, during the loss adjustment process, the policyholder receives a substantial sum from a tenant whose breach contributed to the fire, but does not inform the insurer. The insurer subsequently discovers the recovery. The policy contains an express clause requiring the insured to disclose all material facts at the claim stage, including any recoveries against third parties. The insurer relies on the clause, treated as a condition precedent, to reduce its liability to take account of the recovery, and considers whether the non-disclosure was sufficiently serious to engage section 12 of the Insurance Act 2015. On the facts, the insurer concludes that the non-disclosure, while material, was not dishonest, and so section 12 is not engaged; but the policyholder’s failure to disclose engages the contractual condition and reduces the indemnity by the amount of the recovery. The example illustrates the layered operation of the disclosure duty: express contractual obligations, the underlying duty of good faith, and the section 12 fraud regime.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Next review: 2026-12-11.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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