FRANCE Trends and Developments Contributed by: Emmanuèle Lutfalla and Louis Fer, Signature Litigation AARPI
struck down as insufficiently limited. An exclusion that is too narrow may leave the insurer exposed to pre- cisely the losses it sought to avoid. There is a more fundamental obstacle. French insur- ance law requires fortuity as a condition of valid cover- age. Intentional pollution and chronic contamination that is the foreseeable and permanent consequence of an industrial process fall outside the scope of insur- ance entirely. They are not excluded by a contractual clause; they are uninsurable by nature. For PFAS, the classification is not always straightforward. Where contamination results from the ordinary and known use of these substances over decades, the argument that there was no genuine uncertainty at the time of the alleged pollution becomes difficult to dismiss. The French Insurance Federation and the French Reinsurance Professionals Association have taken the position that PFAS represent a systemic risk whose management falls primarily to public authorities. Whether the market will find contractual mechanisms to retain some portion of the exposure remains one of the most consequential open questions in French environmental insurance. For insurers, PFAS will therefore generate litigation as much as underwriting concern. Policyholders are likely to challenge PFAS exclusions that are drafted so broadly or imprecisely that they fail French law’s requirement that exclusions be formal and limited. In multi-party industrial contamination cases, subro- gation disputes may proliferate as property damage insurers seek recovery from successive liability insur- ers, operators, manufacturers and other contributors, with each contesting causation and allocation. The direct-action mechanism, which permits an injured third party to claim directly against the liable party’s insurer, adds a further procedural route and may bring insurers into proceedings before coverage issues have been resolved between insurer and insured. Climate Litigation and the Duty of Vigilance On 12 February 2025, the Paris Judicial Court deliv- ered its decision in proceedings brought by Friends of the Earth France, Greenpeace France and a French environmental association against TotalEnergies. The ruling is significant not because the court found a
breach of the duty of vigilance (the merits remain to be determined at a hearing scheduled for January 2027) but because of the analytical framework it established. The court reasoned in terms of contribution to climate change rather than direct causation and considered that Scope 3 emissions, those generated by the end use of products sold by the company, could fall within the scope of the vigilance obligation. For a major oil and gas company, Scope 3 represents the vast major- ity of its carbon footprint. The TotalEnergies case does not stand alone. In 2023, Oxfam France and several co-claimants launched pro- ceedings against BNP Paribas, arguing that the bank’s financing of fossil fuel projects violates its own duty of vigilance under the Law of 27 March 2017. The exten- sion of climate accountability to financial institutions signals that the perimeter of potential defendants is far wider than the extractive and industrial sectors. What does this mean for insurers? Several conse- quences follow. Directors and officers face mounting personal exposure to greenwashing allegations, par- ticularly as the EU Corporate Sustainability Report- ing Directive (CSRD) imposes detailed and auditable sustainability disclosures. A company that overstates its environmental credentials in its CSRD reporting creates a documentary trail that plaintiffs can exploit. D&O policies will bear an increasing share of this liti- gation cost. Beyond D&O, the duty of vigilance law itself opens a broader front: companies are required to identify and prevent serious harms to human rights and the environment throughout their supply chains, and a failure to do so can ground civil liability. Insur- ers providing liability cover to companies subject to these obligations will need to assess not only the poli- cyholder’s direct operations but the adequacy of its vigilance plan across its entire value chain. Climate proceedings are also translating into insur- ance disputes. D&O insurers may face early notifi- cation and coverage questions when directors are named personally, even before liability is established. Liability insurers must determine whether duty of vigi- lance claims fall within standard wordings or represent a new category of uninsured risk. In multi-party cli- mate cases, subrogation may be contested between property and liability insurers, while defence costs
120 I NSURANCE L I T IGATI O N 2026
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