DENMARK Law and Practice Contributed by: Josefine Movin Østergaard and Johannes Hedegaard, Bruun & Hjejle
7.4 Supply Chain and Systemic Loss Events Supply-chain instability and energy-market volatility have given rise to increased business-interruption, contingent business-interruption, and trade-credit claims in the Danish market. These exposures have tested aggregation provisions, particularly where mul- tiple policyholders experience losses traceable to a common geopolitical cause, such as a shipping-route disruption or an energy-price spike. Accumulation risk has become a focus of reinsurance negotiations. While a distinct new “category” of insured loss has not been formally recognised, the practical effect has been to stretch existing wordings – particularly in rela- tion to the definition of “event” and the causal link required for contingent business-interruption claims – and to encourage more precise policy drafting for supply-chain and systemic-risk scenarios. 7.5 Forward Outlook and Market Response Ongoing geopolitical uncertainty is expected to drive continued refinement of exclusion clauses, restrictive aggregation language, and more granular risk-infor- mation requirements at placement. Underwriters are likely to require enhanced disclosure of supply-chain dependencies, geographic exposures and sanctions- compliance frameworks. Dispute activity is expected to remain elevated in marine, cargo, energy, trade- credit lines and cyber-insurance coverage disputes. 8. Emerging Risks 8.1 Market Overview of Emerging Risks Cybercrime and political unrest are the leading con- cerns for the Danish insurance industry, followed by legislation, climate change and artificial intelligence. These concerns are likely to translate directly into cov- erage disputes. Cyber losses will continue to test the scope of affirma- tive coverage, war and state-actor exclusions, causa- tion and aggregation, while regulatory breaches may raise questions concerning exclusions, notification duties and defence costs. Climate-related physical losses, transition risks and greenwashing allegations may engage property, liability, professional indemnity and D&O policies.
PFAS and other long-tail environmental liabilities, con- centrated supply chains, reputational harm and coor- dinated claims remain important additional exposures. The Danish market is responding through more granu- lar policy language, tighter risk-information require- ments and increased use of data-driven underwriting, but existing wordings may not map cleanly onto novel or interconnected losses. 8.2 Impact of ESG on Underwriting and Insurance Litigation Weather Conditions and Natural Disasters One of the most significant impacts comes from the increased frequency of extreme weather events. In Denmark, recent years have seen significant storm damage and extreme rainfall, leading to floods, all of which have significantly influenced underwriting assessments. Natural disasters are also affecting underwriting risk. A pertinent example of the impact of natural disasters in Denmark is the “Nordic Waste” case. See 4.7 ESG and Climate-Related Coverage . ESG as a Risk Factor If an insured performs poorly in the ESG areas, this can lead to reputational damage, regulatory scrutiny and legal challenges, all of which may result in insurance claims. Therefore, some Danish insurance companies have started to incorporate ESG factors as risks on a par with other traditional risks when underwriting new customers. Regulatory Scrutiny Regulatory scrutiny is also increasing. In 2026, the Danish Financial Supervisory Authority (FSA) issued formal orders following a targeted sustainability inspection of the Danish insurer Velliv Pension & Livs- forsikring A/S. The identified deficiencies concerned disclosure of sustainability risks affecting product returns, the classification of alternative investments as sustainable, and compliance with both the “do no sig- nificant harm” and principal adverse impact require- ments. The FSA expects insurers to assess material climate risks in their risk and solvency assessments and has identified significant shortcomings across the non-life sector. Insurers offering insurance-based investment products must also comply with sustain-
99 I NSURANCE L I T IGATI O N 2026
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