FRANCE Law and Practice Contributed by: Emmanuèle Lutfalla and Louis Fer, Signature Litigation AARPI
4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes One of the main trends in France is the increasing complexity of coverage disputes, particularly where new risks do not fit neatly within traditional policy wordings. Cyber-risks and, increasingly, AI-related risks are good examples, as it can be difficult to deter- mine which policy should respond and whether exist- ing exclusions were drafted to address these risks. An interesting development is the changing role of insurers in this area. Insurers are no longer simply stepping in after a loss has occurred. In cyber-insur- ance in particular, they increasingly seek to prevent or limit losses by requiring insureds to implement spe- cific security measures before providing cover, and sometimes by making continued coverage conditional on maintaining those measures. This approach could become increasingly relevant for AI-related risks as well. Environmental liability and product liability also remain important areas, particularly where losses develop over time or involve complex international supply chains. These developments are pushing insurers towards more detailed wordings and stronger risk-manage- ment requirements, while insureds are increasingly focused on avoiding gaps in coverage and under- standing the practical conditions attached to their policies. 4.2 Policy Wordings and Interpretation Developments French courts generally take a strict approach to policy wording, particularly when interpreting exclu- sions. Exclusion clauses must be formal and limited in scope, and courts will not hesitate to disregard an exclusion that is too broad or ambiguous. The underly- ing principle is that an exclusion should not effectively deprive the policy of the coverage that was agreed. Ambiguity can therefore work against the insurer, particularly where the wording has been drafted by the insurer and is open to more than one reasona- ble interpretation. Courts will look at the policy as a
whole rather than considering individual provisions in isolation, which can be important where the insuring clause, exclusions and definitions interact. Endorsements can raise similar issues. Where an endorsement modifies or restricts the original word- ing, courts will generally look carefully at its precise terms and how it interacts with the rest of the poli- cy. Inconsistencies between the main policy and an endorsement can therefore become a source of dis- pute. 4.3 Cyber and Technology-Related Coverage Issues Digital risks do not fit neatly within traditional insur- ance categories, and this is generating a growing number of coverage disputes. Key areas of contention include the scope of standalone cyber policies, the application of war and terrorism exclusions to state- sponsored attacks, and “silent cyber” exposure under traditional property and liability policies. Technology failures, including cloud service outages causing business interruption, are also generating dis- putes, particularly around the trigger of cover, causa- tion and the quantification of intangible losses. Sys- temic events create an additional challenge: a single software vulnerability or co-ordinated cyber-attack may affect multiple policyholders simultaneously, rais- ing difficult questions around aggregation and policy limits. Insurers are responding by tightening policy word- ings, introducing specific sub-limits and exclusions for cyber-events, and requiring minimum cybersecu- rity standards as conditions of cover. This reflects a broader shift in the role of the insurer. Rather than simply indemnifying losses after an incident, insur- ers are increasingly seeking to influence how risks are managed before they materialise. The market is still adapting, and coverage gaps remain a significant source of friction, particularly as AI and increasingly interconnected technologies create new forms of liability that existing policies were not neces- sarily designed to address.
107 I NSURANCE L I T IGATI O N 2026
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