An insurer was entitled to avoid cover where the insured failed to disclose a series of fires affecting its scrap metal cargoes. The decision in Cometsambre SA v Lloyd's Insurance Company SA [2026] EWHC 1837 (Comm) provides useful guidance on several aspects of the duty of fair presentation under the Insurance Act 2015, including the materiality of incidents that did not give rise to a claim, the limits of the "waiver" and "presumed knowledge" defences, and how courts assess inducement evidence.
Background
In 2008, Cometsambre, a Belgian scrap metal dealer, sought insurance via their broker, Concordia, to cover its potential liability as charterer of vessels carrying cargoes of scrap metal from Ghent, Belgium. As part of this process, Concordia provided Cometsambre with a Charterers’ Liability questionnaire. Insurance was ultimately placed with Lloyd’s via an insurance coverholder, AMICA. Cover with AMICA was renewed on almost identical terms between 2010 and 2022.
Between May 2020 and October 2021, Cometsambre experienced five fires; three on board chartered vessels and two in quayside stockpiles awaiting loading. The occurrence of these fires was never disclosed to insurers, and the policy renewed in 2022 without disclosure of them. In June 2022, a cargo of Cometsambre’s scrap metal was loaded onto the chartered vessel LOWLANDS MIMOSA, and was involved in a fire on board, which gave rise to a substantial claim against Cometsambre under the charterparty.
Issues before the court
Cometsambre claimed for a declaration that Lloyd’s was liable to indemnify it in respect of the charterparty claim and associated costs. Lloyd’s contended that it was entitled to avoid cover on the basis that Cometsambre breached its duty of fair presentation of the risk by failing to disclose the earlier fires.
The court considered a number of key aspects relating to the duty of fair presentation of risk, including:
- Whether Cometsambre knew or ought to have known of the fires.
- Whether the fires were "material circumstances" requiring disclosure.
- Whether Cometsambre had given sufficient information to put insurers on notice to make further enquiries.
- Whether the insurer was presumed to know of the fires, or had waived disclosure.
- Whether the insurer was "induced" into the contract of insurance. The court considered whether, but for the non-disclosure, it would not have entered into the 2022 renewal on any terms.
Knowledge
Cometsambre denied that any relevant person had knowledge of at least one fire (a quayside fire in May 2020). The court rejected this. A fire at the insured's own premises requiring fire brigade attendance would, at minimum, have been revealed by a reasonable search of information available to the insured.
Materiality
Cometsambre alleged that the fires were not material on the basis that (i) the fires had not previously resulted in a claim; and, (ii) quayside fires are irrelevant to a charterers' liability policy.
The court accepted the insurer's expert evidence that a prudent underwriter would want to know about every fire on a chartered vessel, regardless of whether it gave rise to a claim. The court held that an underwriter would want to know of the incidence of fires because it would help the underwriter assess what the extent of the fire risk was.
The court accepted the position that fires are a ‘paradigm example’ of an incident capable of giving rise to a, potentially, very large claim. The absence of a claim does not render the incident immaterial. Furthermore, the court accepted that a fire in scrap waiting to be loaded could just as easily have occurred on board. It was ‘only fortuitous’ that those fires happened on the quayside.
Sufficient information / insurers put on notice
Cometsambre argued that, by telling insurers it shipped HMS scrap (which carries some inherent fire risk) and by not being asked renewal questionnaires, it had done enough to put insurers on notice to ask further questions. The court rejected this as an improper attempt to reverse the burden of the duty of fair presentation. What had actually happened was a sudden cluster of fires after a long fire-free period, which was not something the insurer had been put on notice to enquire about. This suggested a change in risk profile, which ought to have been disclosed to insurers.
Presumed knowledge and waiver
The court found that insurers could not be presumed to know about Cometsambre's specific fire history, still less about five fires in 18 months after a long period without any.
On waiver, Cometsambre argued that the insurer's failure to request updated questionnaires or to ask about incidents amounted to a communication that it was only interested in claims, not fires. The court held that:
- The fact that the questionnaire provided by Concordia had a question only about ‘Claims record’ could not reasonably be understood to indicate that underwriters were not interested in any instances of fire which had not given rise to a claim. The original questionnaire was prepared by Cometsambre's own broker, not by the insurer. The information contained in it was thus that proffered by Cometsambre, not that specifically requested by AMICA.
- The absence of renewal questionnaires was not unusual and could not reasonably be understood as a waiver.
- Nothing in the insurer's conduct could reasonably be seen as showing indifference to a sudden escalation in fire incidents. At the outset, AMICA had made enquiries designed to ensure that fire risky cargo was not being covered.
Inducement
The court commented that ‘the issue of inducement is one to be judged primarily on the basis of factual, not expert, evidence: … had there been a fair presentation, … [would AMICA] have refused to enter into the relevant policy, either on the same or any terms.’ The insurer's underwriter gave evidence that he would not, at any premium, have renewed the policy had the fires been disclosed. The underwriter stated and the court noted that:
- The premium was very low relative to the potential exposure on a fire claim.
- Five fires in a short period after a 12-year clean record pointed clearly to a changed risk profile.
- The insurer's treatment of a different insured (BST) where two fires had been disclosed, surveyors appointed, and the policy renewed was distinguishable because BST had been transparent, its surveyor found no cargo quality issues, and it paid six times more premium than Cometsambre.
The court found the underwriter’s evidence reliable. The court also noted that Cometsambre had not established the correct counterfactual in cross-examination: the real question was not, what would have happened if each fire had been disclosed one by one, but what the underwriter would have done if told of all five at the 2022 renewal.
Comment
The judgment provides a useful reminder of key fair presentation considerations. The case clarifies the insured’s obligations under the duty of fair presentation and emphasises that the responsibility for ensuring a fair presentation of the risk rests squarely with the insured. An insurer's failure to ask probing questions at renewal does not relieve the insured of its obligation to volunteer material information.
A single isolated incident may not change an underwriter's view, but a cluster of similar events, particularly after a long uneventful period, is likely to be seen as a change in risk profile. The duty of fair presentation extends to material circumstances whether or not they have yet resulted in a formal claim. Where there is any uncertainty as to whether a fact or circumstance is material, it should be disclosed.
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