A successful Insight check should reveal useful information to players, and an unsuccessful check should emphasize uncertainty
My guiding principles with Insight are:
- That it reveals information about the immediate situation being
examined, and not necessarily about the world itself
- Success suggests a keen understanding of the circumstance, while
failure indicates poor understanding
I feel it is important to include both elements.
In your specific example, I would present these elements as the bloodthirsty servant being sincere in his belief that he works for the paladin on a successful Insight check. Players should not learn the true state of the world (definitively discovering the relationship between these NPCs just based on evaluating the servant’s claim) from examining what the servant says.
In the case of a failed Insight check I would narrate the outcome as a lack of information, rather than being certain that incorrect information is definitely accurate. The failure of insight just means that they have no particular understanding of meta-information about the servant and the assertion the servant has made. The narration I favor would emphasize that– “he doesn’t seem to be obviously lying to you, but you can’t get a good read on him at all.”
I recommend not forbidding checks because there is no dishonesty to discover. This directly reveals to players the same information they would get on a successful Insight check, but without having to roll. When something seems off to players, or they want to double-check information they receive, they should be encouraged to try to find out via their characters’ ability to examine what they know and perceive.
I suggest not giving false information on a poor roll for similar reasons: players will know they rolled poorly (unless you use a hidden-roll mechanic), and so telling them definitive information pretty clearly marks that information as unreliable. I also advocate not directly lying to players more broadly, but that’s out of scope here.
My experiences with running Insight checks this way have been that they help situate players in the game, even if it doesn’t shed much light on the plot. They want more information, and if an Insight check doesn’t provide it they either have to hope for the best and stay wary, or they try to verify claims in other ways (like investigating the claim after the conversation). The opportunity for NPCs to lie to or otherwise deceive the PCs is a part of the adventure, distinct from the players’ dependence on me, the GM, to provide the information necessary for the players play the game at all.