FRANCE Law and Practice Contributed by: Emmanuèle Lutfalla and Louis Fer, Signature Litigation AARPI
1. Key Drivers and Resolution of Insurance Disputes
Cross-border insurance programmes add a further layer of complexity. Master policy wordings, often based on English-law drafting conventions, must be
1.1 Common Triggers of Insurance Disputes Coverage interpretation and ambiguity in policy word- ing are by far the most common triggers of insurance disputes in France, cutting across all lines of busi- ness. Property damage, product liability, and financial lines (D&O, cyber, and fraud) consistently generate the highest volumes of contentious matters. In practice, the real question is almost always whether a loss is covered, and things become significantly more com- plicated when multi-layered programmes involve master policies, local policies and captives. Claims handling issues, including late notification and com- pliance with policy conditions, also remain a steady consistent of litigation. The landscape has shifted over the past few years. Cyber-insurance is now a genuine hotspot, driven by disputes over ransomware coverage and whether war exclusions apply to state-sponsored cyber-attacks. ESG and climate-related claims are on the rise, espe- cially in D&O and professional indemnity, as directors face increasing scrutiny over environmental commit- ments. Construction and environmental liability con- tinue to produce some of the most technically com- plex disputes, including cases arising from industrial fires involving lithium battery storage. 1.2 Role of Policy Wording and Drafting Drafting quality matters enormously in France and can be a significant source of insurance disputes. French courts take a strict approach to exclusion clauses, which must be clear, precise and limited in scope. Vague or overly broad exclusions may therefore be set aside, particularly where they effectively deprive the policy of its substance. Some areas regularly give rise to disputes. The defini- tion of the insured event is a recurring issue, notably in long-tail liability and serial loss cases. Notification and claims conditions can also be contentious, as can aggregation clauses where a single event or series of events results in significant losses. The distinction between conditions of cover and exclusions is anoth- er frequent source of litigation, as it can determine whether an insurer is entitled to deny cover.
reconciled with French mandatory rules. 1.3 Dispute Resolution Strategy and Outcomes
In practice, a large number of insurance disputes in France are resolved through negotiation, particularly where the parties have a common interest in con- trolling costs and preserving their commercial rela- tionship. This process is often supported by a jointly instructed loss adjuster or expert to assess and quan- tify the claim. Mediation is also gaining ground, espe- cially in cross-border matters. A distinctive feature of the French system is the role of court-ordered expert appraisal proceedings. In complex construction, industrial risk or product lia- bility disputes, a court may appoint a judicial expert to investigate causation and assess the loss before the merits are determined. These proceedings can take months, and sometimes several years in com- plex cases, but they often help narrow the issues and ultimately facilitate settlement. Where litigation is unavoidable, proceedings will gen- erally take place before the civil or commercial courts. This can involve significant legal and expert costs, particularly in complex cases. Arbitration is more com- mon in reinsurance disputes and large international programmes, with Paris being a well-established seat. 2. Jurisdiction and Choice of Law 2.1 Choice of Law in Insurance Contracts In France, the governing law of an insurance contract is primarily determined by the applicable European rules on contractual choice of law. In principle, the parties may choose the law governing the contract, but this freedom is not unlimited. Insurance contracts are subject to specific rules designed to protect poli- cyholders, particularly where the insured is a consum- er or a smaller business. In commercial insurance, parties generally have great- er flexibility to agree on the applicable law, especially
104 I NSURANCE L I T IGATI O N 2026
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