PORTWOOD GUIDES & RESOURCES
Guidance
Important information and glossary
Your important client guide, organised for everyday use. These notes mainly concern commercial insurance. Choose a topic below; each section starts closed. Your policy wording takes priority where it defines a term differently.
Portwood Important Client GuideRead the full client guide (PDF) ↗Your disclosure duties ↓Claims and policy conditions ↓Values and cover ↓Checks and optional covers ↓Insurance glossary ↓
Your disclosure duties
01Fair presentation and disclosureTell insurers what matters when arranging, renewing or changing business insurance.+
- For commercial, non-consumer insurance, disclose material circumstances you know or ought reasonably to know, or give enough information to alert the insurer that further enquiries are needed. Information must be clear, substantially accurate and supplied in good faith.
- A material circumstance can affect whether an insurer accepts or continues the risk, the premium, or the terms, exclusions and conditions. Include unusual risk features and concerns that led you to seek cover.
- Make a reasonable search with senior management, the people arranging insurance and others holding relevant information for your business. Present findings clearly; an unstructured bundle of documents may not satisfy the duty.
- Keep written or electronic evidence of the search and how you checked the answers. Some information need not be disclosed, including matters the insurer knows or ought to know, common knowledge, matters reducing the risk and information it has waived. Ask Portwood if unsure; do not assume information is already known.
02General matters to discloseCheck claims history, insurance decisions, financial history and official notices.+
- Include losses, damage, injuries, incidents and circumstances that could lead to a claim, even if uninsured or no claim was made. Tell us about proposals declined, cover cancelled or renewals refused by insurers.
- Check relevant convictions, director disqualifications, bankruptcy, County Court Judgments and involvement of directors or partners in businesses that entered liquidation or administration, were dissolved or experienced similar difficulties. Ask what must be disclosed under applicable law.
- Disclose relevant council or statutory notices and warnings, withdrawn licences and the financial position of the business. These examples are not exhaustive.
03Business activities and changesKeep us informed about what your business does and where it operates.+
- Review activities, processes, products, territories and changes to them, including new companies, acquisitions, disposals, markets, premises, additional items and alterations to buildings.
- Highlight unusual or hazardous work, materials and practices, including heat, chemicals, working at height and risks or liabilities above those normally expected in your business or sector.
04Property and material damage disclosuresConstruction, occupancy, protection and storage can affect cover.+
- Tell us about building construction, including higher fire-risk composite panels; occupancy changes or other occupiers; and changes to alarms, locks, fire protection or other security measures.
- Include new or modified processes, especially heat work; increased hazardous materials or theft-attractive stock; attempted break-ins or arson; and use of temporary or third-party premises.
05Liability, motor and business travel disclosuresCheck the details relevant to each policy, including historic activities.+
- Liability: disclose current and previous activities, new companies or products, imports and exports, overseas work, especially the USA or Canada, hazardous locations such as offshore installations, and health and safety investigations or prosecutions.
- Motor: disclose relevant driving convictions or licence changes and disqualifications, corporate investigations or prosecutions, previously unreported accidents, performance modifications, vehicle use and ownership, including personally owned vehicles used for the business.
- Business personal accident and travel: disclose activity changes, manual work and significant changes in destinations, territories, travel patterns or number of journeys. Relevant information may need to be disclosed even if no specific question was asked.
06Insurer remedies for incorrect informationThe remedy depends on the breach and what the insurer would have done.+
- The insurer must establish a qualifying breach of fair presentation: it would not have insured, or would have offered different terms, if the correct information had been given. For a deliberate or reckless breach it may avoid the policy from inception, refuse claims and retain the premium; it must establish that the breach was deliberate or reckless.
- For other qualifying breaches, the insurer may avoid the policy and return the premium if it would not have insured at all, apply the terms it would have required, or reduce a claim in proportion to a higher premium it would have charged. More than one remedy can apply where permitted. Separate rules can apply to policy variations.
- Example: if £1,000 was paid but £1,500 should have been charged, the default premium-based remedy may reduce a covered claim to two-thirds of its amount. Different wording or valid contracting out can change the position; Portwood will explain the implications and options.
Claims and policy conditions
07Fraudulent claimsFraud can affect the claim and cover from the fraudulent act.+
- An insurer may reject a fraudulent claim, including genuine elements of that same claim, and recover amounts already paid for it. It may terminate cover from the fraudulent act; fraud does not automatically end the policy in every case.
- Under the default rules, legitimate losses before the fraudulent act are not affected by that termination. The policy terms and applicable law determine the position.
08Warranties and conditions precedentIdentify requirements, deadlines and evidence before a problem arises.+
- Requirements can appear as warranties, conditions, endorsements or special terms. Read the wording and schedule carefully, record the actions required and ask Portwood if a requirement is unclear or cannot be met. A breach can affect cover or payment.
- Under the Insurance Act default rules, a warranty breach generally suspends liability for losses occurring, or attributable to events happening, during an unremedied breach. Remedying a breach can restore protection for future losses; some breaches, such as a construction requirement, may not be remediable.
- For certain risk-reduction terms, the insurer may be unable to rely on a breach if you show it could not have increased the risk of the loss that actually occurred. This protection does not apply to every term. Keep compliance records and ask for advice.
- A condition precedent may require an action before cover attaches or before an insurer is liable for a claim. The consequence of non-compliance depends on the type of condition, the wording and applicable legal protections.
09Claims notification and paymentsFollow the policy reporting route and deadline.+
- Notify claims and circumstances that may lead to a claim immediately or within the period your policy requires. Follow the insurer’s documents and Portwood’s instructions; late notification can affect entitlement to cover or payment.
- Valid claims must be paid within a reasonable time, allowing for the type of insurance, claim size and complexity, investigation, legal or regulatory requirements and factors outside the insurer’s control. A reasonable dispute may delay payment while investigated or resolved.
10Your cover and communicable diseasesRead each policy section and keep declared information accurate.+
- Your documents set out the information declared, insured values, sections, limits and excesses. Keep these accurate, complete and up to date. Cover depends on the insured cause of loss, wording, conditions, exclusions, endorsements and applicable law.
- Disease, epidemic, pandemic and related business interruption cover varies significantly between wordings. Many policies restrict or exclude these events. Check every relevant section and ask Portwood before relying on cover.
Values and cover
11Review declared values and sums insuredAllow for the full value at risk, inflation and business growth.+
- Regularly review declared values, sums insured, limits of indemnity and maximum indemnity periods. Include inflation, capital additions and anticipated business growth throughout the insurance period. Inadequate cover can leave part of a loss unpaid.
- Portwood can discuss quotations, calculation guidance and different indemnity periods, but does not act as a valuer or surveyor. Responsibility for adequate values and periods remains with the policyholder. Use your accountant or another suitably qualified adviser.
12Business interruption insurancePlan for the time and money needed to restore trading.+
- Calculate insured gross profit, revenue or fees using the exact definition in your policy. The maximum indemnity period should allow the business to reach the trading position it would have achieved without the loss.
- Allow for inflation, future growth, rebuilding premises, replacing equipment and re-establishing trading. If you do not have business interruption cover, consider whether it is appropriate and ask Portwood for a quotation.
13Buildings insurance and rebuilding costsUse reinstatement cost rather than market value.+
- Include all insured buildings, garages, driveways, outbuildings and other structures. Allow for materials, labour, professional fees, demolition, debris removal, planning or public-authority requirements and inflation during both the policy and rebuilding periods.
- Normally include VAT where it cannot be recovered. If VAT is recoverable, ask your accountant before excluding it; residential properties can be particularly complex. Listed, historic, unusual or specialist buildings may cost more and take longer to reinstate.
- The guide recommends a professional reinstatement-cost assessment by a chartered building surveyor at least every five years and after a material alteration or extension. Review values between assessments as circumstances change.
14Contents, machinery and equipmentInsure replacement as new and keep an up-to-date inventory.+
- Generally use new-for-old replacement cost rather than balance-sheet or depreciated value. Include delivery, installation, debris removal, disposal and irrecoverable VAT where the policy requires.
- Keep an inventory of contents, machinery, plant and equipment, including customers’ goods for which you are responsible. For specialist, complex or discontinued equipment, consider equivalent replacement cost, availability and lead time.
15Stock insuranceUse the maximum replacement cost at any one time.+
- Include carriage, delivery and associated costs. Stock is not normally insured at its sale price unless insurers have specifically agreed.
- For manufacturers, assess raw materials at current market cost plus freight, unloading, storage, irrecoverable taxes and duties. Work in progress includes directly incurred manufacturing costs and relevant factory overheads.
- Finished goods may use net manufacturing cost or purchase cost, as applicable, plus freight, unloading, storage and irrecoverable taxes. Consider waste materials at their commercial value and debris-removal or disposal costs after an insured loss.
16Average, proportional settlement and valuationsUnderinsurance can reduce both partial and total-loss settlements.+
- Where an average clause applies, an inadequate sum insured can reduce the settlement in proportion to underinsurance. Example: a £300,000 sum insured against a £400,000 rebuilding value is 75% insured; a £100,000 covered loss could be reduced to £75,000, leaving £25,000 for you.
- Average may affect partial or total losses. Incorrect material information can also trigger separate insurer remedies, including avoidance in appropriate cases. The wording, circumstances and applicable law determine the outcome.
- Obtain building or desktop valuations at regular intervals. The supplied guide quotes BCH desktop valuations from £115 plus VAT; confirm the current fee and service scope before ordering. Portwood is not the valuer and cannot verify the adequacy of your declared figures.
Checks and optional covers
17Credit checks and insurer financial strengthUnderstand underwriting checks and the limits of financial-strength reviews.+
- Portwood and insurers approached or recommended on your behalf may carry out credit or identity checks as part of the insurance application and underwriting process.
- Portwood normally considers independent financial-strength ratings and public information when placing business, but cannot guarantee an insurer’s continuing financial security or solvency.
18Employers’ Liability records and ELTOProvide employer references and keep certificates accessible.+
- ELTO helps trace insurers that covered former employers for workplace injury or disease claims. Provide your Employer Reference Number (ERN), also called the Employer PAYE Reference, and relevant subsidiary-company references where applicable.
- Disclose holding, subsidiary and associated companies that need cover; they may need naming on the certificate. Insurers record relevant policy information on the Employers’ Liability Database.
- Electronic certificates must be reasonably accessible to relevant employees. Keeping historic certificates is good practice for tracing old cover, even though the former general certificate-retention requirement was removed.
19Motor insurance records: MID and NavigateKnow who updates your insured vehicle records.+
- Insured vehicles may need recording in the Motor Insurance Database, now accessed through MIB’s Navigate platform. This can include business vehicles, demonstrators, trade plates and courtesy or loan vehicles. Keep required records accurate and current.
- For single vehicles and fleets where every change is notified as it happens, the insurer will usually update records. Under some declaration-based fleet arrangements, you may need to update them yourself. Confirm responsibility and obtain login and helpdesk details from your insurer if required.
- Incorrect or missing records can lead to checks and enforcement difficulties. A recorded insurance entry does not establish the level or scope of cover; your policy documents remain the evidence of what is insured. Ask Portwood if responsibility is unclear.
20Optional covers and additional productsChoose extras actively and review whether you still need them.+
- An optional extra cover extends the main policy rather than being a separate product. Examples include commuting use, accidental damage to buildings or contents, and winter-sports cover, where available.
- An optional additional product is separate insurance bought alongside the main policy, such as legal expenses, loss recovery or supplementary protection. Understand its cover, restrictions and price before choosing.
- Paid optional additional products require your active choice; a pre-ticked box or silence is not an active election. Review selected extras at renewal and contact Portwood promptly if you no longer need them or want to understand the effect of changing cover.
Insurance glossary
21Claims-made policiesTap for the meaning and what to check.+
- The policy in force when a claim is first made may respond, subject to its notification rules, retroactive dates and other terms. Maintain suitable continuous or replacement cover for historic work; notify claims, complaints and circumstances promptly within the policy deadline.
22ConditionsTap for the meaning and what to check.+
- Actions or standards required by a policy. A breach may reduce or prevent payment or affect cover, depending on the wording, relevance to the loss and applicable law.
23Conditions precedentTap for the meaning and what to check.+
- Requirements that must be met before cover attaches or the insurer is liable for a claim or policy section. The consequence of a breach depends on the wording, circumstances and applicable legal protections.
24AverageTap for the meaning and what to check.+
- A policy provision that can reduce a settlement in proportion to inadequate declared values or sums insured. The guide’s example is £300,000 insured against a £400,000 value: a £100,000 loss could pay £75,000, subject to the policy.
25Day OneTap for the meaning and what to check.+
- You declare the rebuilding value at the start of the policy and insurers add an agreed uplift for inflation. £1,000,000 with a 30% uplift gives a £1,300,000 maximum, subject to wording. The original declared value must still be adequate; an uplift does not cure an understated value.
26Employers’ LiabilityTap for the meaning and what to check.+
- Insurance against an employer’s legal liability for injury or illness suffered by employees in the course of employment. Check all entities needing cover, certificate access and applicable ERN information.
27Excess / deductibleTap for the meaning and what to check.+
- The contribution you pay towards an insured loss. The insurer normally pays the covered balance above the applicable excess or deductible.
28FranchiseTap for the meaning and what to check.+
- A loss amount or time threshold that must be exceeded before the policy responds. Once exceeded, the insurer may pay the full covered loss, subject to the wording. Unlike an excess, a franchise is not normally deducted from that payment.
29IndemnityTap for the meaning and what to check.+
- Restoring you, as far as possible, to your financial position immediately before an insured loss, without allowing a profit from the loss.
30Minimum and deposit premiumTap for the meaning and what to check.+
- An initial premium based on estimated turnover, wages, activity or another rating factor, adjusted later using actual figures. Higher activity can mean more premium. The deposit is usually the minimum and may not be refundable after cancellation or lower activity.
31Reinstatement as newTap for the meaning and what to check.+
- Repairing, replacing or rebuilding insured property to a condition equivalent to new, subject to the policy terms, limits and exclusions. It does not apply automatically to every item or section.
32SubjectivityTap for the meaning and what to check.+
- An insurer requirement before cover is confirmed or continued, normally with an action, deadline, interim terms and consequences. Missing it may leave cover absent, restricted or withdrawn.
33Proportionate settlementTap for the meaning and what to check.+
- A premium-based reduction may apply if incorrect material information affected the price. It reflects the premium paid compared with the premium that should have been charged, subject to the policy and law; it is distinct from average for inadequate sums insured.
34SubrogationTap for the meaning and what to check.+
- After paying a claim, insurers may pursue a responsible third party to recover their outlay. Do not admit liability, waive recovery rights or make agreements that prejudice recovery without the insurer’s consent.
35Suspensive conditionTap for the meaning and what to check.+
- A policy requirement that can suspend cover while breached. Insurers may not be liable for losses during suspension; whether and how cover resumes depends on the wording and applicable law.
36WarrantiesTap for the meaning and what to check.+
- Important policy terms requiring compliance. Under the default rules for many commercial policies, a breach suspends liability until remedied rather than automatically ending the whole policy, subject to the wording and applicable law.
37Duty of fair presentationTap for the meaning and what to check.+
- For commercial insurance, disclose material circumstances you know or ought reasonably to know, or enough to alert insurers to enquire. Present information clearly and substantially accurately. Also take reasonable steps to prevent or minimise loss where possible.
These practical notes summarise the supplied guide; the original PDF remains available above. The glossary is not exhaustive. Ask Portwood for advice about your own policy, a proposed change or a requirement you cannot meet.
Your policy wording and endorsements determine your cover and specific obligations. Ask Portwood if a requirement is unclear or cannot be met.
Source: Portwood Important Client Guide · V1 010826. Added to Guidance on 21 October 2026.