Statute

Insurance Act 2015, section 11: terms not relevant to the actual loss

In short: Section 11 stops an insurer relying on breach of certain risk-reducing terms where the breach could not have made any difference to the loss that actually happened. It applies to a term, other than one defining the risk as a whole, compliance with which would tend to reduce the risk of loss of a particular kind, at a particular location or at a particular time. The insured must show that the non-compliance could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.

Category: Statute · Insurance Act 2015
Also known as: IA 2015 s.11, section 11 Insurance Act 2015, terms not relevant to the actual loss
Related concepts: section 10, MIA 1906 s.33

The problem section 11 addresses

Insurance contracts are full of terms designed to reduce a particular kind of risk: keep the alarm set, fit five-lever locks, hold a valid gas safety certificate, do not store stock within a metre of a wall. Before the Insurance Act 2015, breaching one of those terms could defeat a claim that had nothing whatever to do with it. A lapsed alarm maintenance contract could be raised against a claim for a burst pipe.

Section 11 addresses that mismatch. It is not about whether a term has been breached — it has — but about whether the insurer may rely on the breach in relation to the loss that actually happened.

Which terms it applies to

Section 11(1): the section applies to a term, express or implied, of a contract of insurance, other than a term defining the risk as a whole, if compliance with it would tend to reduce the risk of one or more of the following — (a) loss of a particular kind, (b) loss at a particular location, (c) loss at a particular time.

Two points follow. The section is not limited to warranties: it catches any term of that character, including conditions precedent and exclusions drafted as risk-control requirements. And the carve-out for a term “defining the risk as a whole” keeps genuinely definitional terms outside the section — a policy that insures a named vehicle, or a stated trade, or a particular address, is describing what is insured rather than imposing a risk-reduction requirement.

The test, precisely

Section 11(2): if a loss occurs, and the term has not been complied with, the insurer may not rely on the non-compliance to exclude, limit or discharge its liability under the contract for the loss if the insured satisfies subsection (3).

Section 11(3): the insured satisfies this subsection if it shows that the non-compliance with the term could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.

The wording repays close reading. The burden sits on the insured, not the insurer. The standard is “could not have increased the risk” — not “did not cause” and not “probably made no difference”. And the comparison is against the loss which actually occurred, in the circumstances in which it occurred, which is a narrow and factual enquiry rather than a general assessment of the term’s importance. Section 11 is not a causation test in the ordinary sense; it asks a counterfactual question about risk.

How it works alongside section 10

Section 11(4) states that the section may apply in addition to section 10. The two operate on different axes. Section 10 governs what a breach of warranty does — it suspends cover rather than discharging the contract. Section 11 governs whether the insurer may rely on non-compliance with a risk-reducing term at all in relation to this particular loss.

So a policyholder who has breached a risk-reducing warranty may have two arguments available: that under section 10 the breach was remedied before the loss, and that under section 11 the non-compliance could not have increased the risk of the loss that happened. Neither argument excuses the breach; both go to the insurer’s ability to decline the claim.

What section 11 does not do

It does not entitle anyone to ignore policy terms. A breach that could have increased the risk of the loss that occurred remains fully effective, and the insured carries the burden of showing otherwise, which on contested facts is not always easy. It also does not touch terms that define the risk as a whole, and the line between a definitional term and a risk-reduction term is a matter of construction that has generated real argument.

Contracting out

Section 11 sits in Part 3 of the Act. In a consumer contract, section 15 renders of no effect any term putting the consumer in a worse position in relation to Parts 3 or 4. In a non-consumer contract, section 16 allows a disadvantageous term provided the transparency requirements of section 17 are met — the insurer must take sufficient steps to draw the term to the insured’s attention before the contract is entered into, and the term must be clear and unambiguous as to its effect. Commercial wordings do sometimes contract out of section 11, and it will not usually be flagged in the quotation summary.

What this means in practice

For a commercial buyer the practical lesson is not that section 11 makes conditions safe to breach. It is that risk-control terms should be read at placement, understood by whoever has to comply with them, and checked for contracting-out language. The Act gives a defence; a well-run risk never needs it.

Frequently asked questions

What exactly is the section 11 test?

Where a loss occurs and a risk-reducing term has not been complied with, the insurer may not rely on that non-compliance to exclude, limit or discharge its liability if the insured shows that the non-compliance could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.

Who has to prove what?

The burden is on the insured. Section 11(3) requires the insured to show that the non-compliance could not have increased the risk of the actual loss. That is a demanding standard, and it is one reason the section is a defence of last resort rather than a substitute for complying with policy conditions.

Does section 11 replace section 10?

No. Section 11(4) says it may apply in addition to section 10. Section 10 governs the consequences of breaching a warranty, making the effect suspensory rather than terminating. Section 11 governs whether an insurer may rely on non-compliance with a risk-reducing term in relation to the particular loss that occurred.

Related entries

This entry is part of the Apex Insurance Wiki. It is insurance information about how UK cover responds to the rules described, and is not legal or regulatory advice. Rules, limits and wordings change; the position stated is as at August 2026. Check the primary source and take your own professional advice before relying on any of it.

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