The Commercial Court has provided a useful reminder that the duty of fair presentation under the Insurance Act 2015 is not confined to disclosure of claims only.
In Cometsambre SA v Lloyd’s Insurance Company SA HIG 5321 [2026] EWHC 1837 (Comm), the Court upheld an insurer’s avoidance of a policy where the insured had failed to disclose earlier fire incidents before renewal, despite those incidents not having resulted in claims.
The decision is not surprising but will be welcomed by insurers and should be treated as a cautionary reminder by policyholders and their brokers. It confirms that incidents, near misses and recurring operational issues may be material where they would influence a prudent insurer’s assessment of the risk. It also highlights the importance of clear underwriting evidence when insurers seek to show that, had proper disclosure been made, it would not have written the risk or would have done so on different terms.
The facts
Cometsambre SA was a scrap metal dealer based in Belgium with charterers’ liability cover in respect of its potential liability as charterers of vessels to carry cargos of scrap metal from Ghent, Belgium. Lloyd’s wrote the European risk for Lloyd’s syndicate HIG 5321.
The dispute related to the 2022 renewal year and arose after a serious fire occurred on board the LOWLANDS MIMOSA in June 2022 following the loading of scrap metal cargo onto the chartered vessel.
Cometsambre SA sought an indemnity under the policy in respect of claims arising out of that fire.
Lloyd’s sought to avoid the policy on the basis that Cometsambre SA had breached its duty of fair presentation by failing to disclose earlier fires on board vessels and on the quayside. Lloyd’s position was that, had those incidents been disclosed, it would have declined to offer terms for renewal.
The Court found in favour of the insurer. The earlier fires were material circumstances for the purposes of the Insurance Act 2015 regardless of the fact those incidents had not generated claims.
The Court’s approach
The Court accepted that the undisclosed fires were material. The important point was not simply that fire was a general risk associated with scrap metal cargoes. Rather, Cometsambre SA had experienced a series of fires – five in total – over a relatively short period of 18 months, having previously gone 12 years without similar incidents. That pattern suggested a potential change in the risk profile.
That distinction matters. An insurer may understand the general risk profile of a sector, but that does not mean it knows the insured’s own recent incident history. General market knowledge is not a substitute for disclosure of specific facts known to the insured.
The Court also rejected arguments that the insurer should have asked further questions, or that it had waived its right to disclosure. The duty of fair presentation remained with the insured. The absence of a specific question from the insurer did not mean that material information could be withheld.
On inducement, the Court accepted the insurer’s evidence that it would not have renewed the policy had the earlier fire incidents been disclosed. That was sufficient to justify avoidance.
Key takeaways
First, the case supports a broad approach to materiality. Insurers are not limited to relying on undisclosed claims or formal notifications. Incidents which reveal something about the nature, frequency or seriousness of the risk may be material even if they have not yet produced a claim.
Secondly, the decision recognises the significance of patterns. One incident may sometimes be explained away (but could still be a material fact). A sequence of incidents may suggest a developing issue, a change in risk profile or an increased likelihood of loss. That is precisely the type of information which an underwriter may legitimately want to consider at renewal.
Thirdly, the case is a reminder that insureds cannot rely too readily on an insurer’s silence. The duty of fair presentation does not become passive simply because an insurer has not asked a more detailed follow-up question. If the insured knows of facts which would influence a prudent insurer, those facts may need to be disclosed.
Finally, the decision underlines the importance of underwriting evidence. Avoidance will not follow from materiality alone. Insurers still need to show what they would have done had proper disclosure been made. Where insurers can provide clear and credible evidence that the risk would have been declined, the remedy of avoidance remains available.
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