GERMANY Law and Practice Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
as a first step and subsequent internal claims handling for final decision. Limited Delegation in Large Risk Insurance Complex and high-value claims, however, are still handled in-house, with insurers tapping into their own teams’ experience and knowledge. Both the nuance required in decision-making and the expectations of policyholders diminish the usefulness of delegation in this area. As customer relationships and custom- er retention are especially important in this setting, this approach may not be expected to change in the future. 4.9 Financial Lines Coverage Trends Having digested the aftershocks of COVID-19, the economy is now dealing with the fallout of military and trade conflicts. Inflation rates in 2025/2026 may not reach the levels of 2022/2023, but are still slightly increased, with energy prices and costs being a mas- sive driver in Germany. Coverage of Insolvency-Related Liability One of the results is an increase in insolvency pro- ceedings which, in turn, fuel claims against officers and directors by insolvency administrators. While it had been a long-standing point of debate under Ger- man D&O insurance as to whether claims for refunds of payments made despite insolvency and overindebt- edness were covered, this discussion has since been put to rest by the Federal Supreme Court. Such claims are considered to be, in principle, covered by D&O insurance. In fact, many insurers have now amended their wordings by expressly covering claims pursuant to Section 15b of the Insolvency Code ( Insolvenzord- nung (InsO)). However, a number of questions in connection with insolvency claims remain. These include, by way of example, the coverage exclusion for knowing breach- es of duty and when and to what extent a breach of duty may automatically infer knowledge. This plays a key role in determining insurers’ burden of proof in coverage proceedings. Tightening Duties of Care Apart from the above, there is a continuing trend among German courts to tighten the duties of care
and oversight requirements for officers and directors. A critical question regarding manager liability is cur- rently pending before the European Court of Justice (ECJ): could members of the executive board be held personally liable for fines imposed on the company? The Federal Supreme Court has tended towards the view that recourse for fines is permissible and that D&O coverage for such recourse claims is valid. If the ECJ permits companies to bring recourse claims against their managers, D&O insurers’ risk exposure is likely to increase significantly. 4.10 Casualty Coverage Trends Cyber, environmental liability and losses that are influ- enced by geopolitics will likely play a significant role in future German casualty coverage litigation, as insur- ance policies are widespread and losses are stead- ily increasing in scope and frequency. Generally, the changing exposure due to new and increasing risks results in stricter scrutiny and adjustments to existing wordings by insurers. Non-Affirmative Cyber Exposure For example, as early as 2019, financial supervision authorities flagged non-affirmative cyber-exposures, with EIOPA calling them a “source of concern” in their “Cyber Risk for Insurers – Challenges and Opportuni- ties” report: while insurers, on the one hand, may not be aware of their potential exposures to cyber-risk, policyholders, on the other, face uncertainty as to the scope of coverage. Non-affirmative cyber-risks exist where (non-cyber) policies do not expressly include or exclude cyber-exposure. Insurers have already responded by amending and updating policy wordings to clearly differentiate between losses that are covered and those that are not, often using type of loss as the defining factor. These new wordings may turn out to be the subject of future insurance debate. The Federal Court of Justice has not yet ruled on specific cyber-insurance issues. For now, the relevant case law is developing in the lower courts. As with cyber-risks, environmental liability claims and geopolitical tensions are likely to prompt new cover- age exclusions and test their scope in practice. Future
133 I NSURANCE L I T IGATI O N 2026
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