FRANCE Law and Practice Contributed by: Emmanuèle Lutfalla and Louis Fer, Signature Litigation AARPI
5.2 Shifting Risk Landscape The risk landscape for insureds in France is being reshaped by three main factors: technology, regula- tion and ESG. On the technology front, the proliferation of connect- ed devices, autonomous systems and AI-driven pro- cesses is creating new liability exposures that exist- ing insurance products were not designed to cover. The central unresolved question is who bears liability when an AI system causes harm: the developer who designed the algorithm, the company that deployed it, or the end user who relied on its output. French law does not yet provide a clear answer, and the evolving EU framework on AI liability may significantly affect how claims are brought and defended. Regulatory pressure is intensifying across multiple fronts. The the French Data Protection Authority (CNIL) is actively enforcing GDPR obligations, with fines that can run into millions of euros, increasingly triggering claims under D&O policies. The Sapin II anti-corruption framework imposes compliance obli- gations on larger companies, and failures can lead to both criminal proceedings and civil claims. ESG- related obligations, including reporting requirements under the Corporate Sustainability Reporting Direc- tive (CSRD), are adding a further layer, with directors exposed to claims for inadequate disclosure or failure to implement credible transition plans. Insurers are responding by tightening underwriting cri- teria, requiring evidence of robust compliance frame- works as a condition of cover, and in some cases withdrawing from sectors where the risk profile has become too uncertain to price reliably. 5.3 Defence Costs and Litigation Complexity Defence costs in France have been rising steadily, particularly in complex product liability, construction and environmental disputes. A significant part of the cost comes from court-appointed expert proceedings. In complex cases, these proceedings can last several years, with each party usually retaining its own tech- nical advisers alongside the court appointed expert. Expert fees, technical reports, site visits and written submissions can therefore generate substantial costs before the case even reaches the merits.
Environmental and construction claims raise similar questions. Environmental damage can develop pro- gressively over many years, while construction defects may emerge long after completion and involve several successive policies. This creates difficult questions around the trigger, allocation and long-tail exposure. Casualty claims are becoming more complex, and the central coverage question is shifting from whether a loss is insured to how it should be allocated between different liability regimes, policies and periods of insur- ance. Insurers are responding with more precise trig- gers, exclusions and sub-limits. Principal claims against insureds in France continue to arise from bodily injury, property damage and product liability, but the profile of claims is becoming more varied. Product liability remains a significant area, particularly where a defect affects a large number of products and gives rise to claims further down the supply chain. Construction disputes also generate substantial defence costs, given the number of parties involved and the length of time over which defects may emerge. Insurers are also frequently funding defence costs in professional and financial lines claims, includ- ing allegations of professional negligence, regulatory investigations and claims against directors. In these cases, defence costs can become substantial well before liability is established, making the scope of the insurer’s obligation to fund the defence an important issue in its own right. 5. Claims Against Insureds 5.1 Key Exposure Areas for Insureds Cyber claims are another growing area, particularly following ransomware attacks, data breaches and business interruption. What is interesting is that insur- ers are increasingly involved at an early stage, not only funding lawyers and technical experts after an incident but also coordinating forensic investigations, crisis management and mitigation measures.
110 I NSURANCE L I T IGATI O N 2026
CHAMBERS.COM
Powered by FlippingBook