does the clients homeowners insurance know they have K&T?

The home really needs a complete rewire bringing up to current code

once you muck with this a future fire can see you on the hook for
damages and insurtance company can go after you.........

K&T is very obsolete and what of attic insulation? as you said you
cant imbed K&T in insulation and the roof is the largest loss of heat
in a home......

you say client, are you doing repairs there?