GERMANY Law and Practice Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
disputes can be expected to focus on the causal link between excluded risks and the losses claimed. Finally, casualty coverage debates may also be driven up in frequency due to third-party litigation funding having gained traction in Germany.
almost 24,000 corporate insolvencies were recorded, marking the highest level in decades. Under German law, Section 15b of the InsO establishes personal liability for managing directors for payments made to third parties after the company has become insolvent. A landmark decision of the Federal Supreme Court in 2020 clarified that such claims are covered under D&O insurance – subject to specific exclusions in the individual case. Energy Market Disputes and Political Risks Further, since Russia’s invasion of Ukraine, Germa- ny has been experiencing a volatile energy market, with sharp and closely sequenced price fluctuations creating an error-prone market environment, which, likewise leads to heightened liability exposure. The same is true for other interruptions of global distri- bution networks stemming from a declining level of global security. Cyber-Risks and AI Risks Additionally, in recent years the EU has begun to increase the density of regulation in the areas of IT security, digitalisation and AI use, for example through the NIS 2 Directive (EU) 2022/2555 and the AI Act (Regulation (EU) 2024/1689). This heightened level of regulation, combined with the omnipresence of digital technology in modern enterprises, is likely to be asso- ciated with increased liability risks. 5.3 Defence Costs and Litigation Complexity In proceedings before the state courts, cost reim- bursement is capped at a relatively low level by statu- tory fee schedules, whereas, for example, in arbitra- tion proceedings under the DIS Rules, the successful party can generally recover a much broader range of costs. In line with international trends, the hourly rates charged by counsel providing highly specialised ser- vices in complex insurance litigation in Germany are generally rising.
5. Claims Against Insureds 5.1 Key Exposure Areas for Insureds Product Liability
In Germany, the Product Liability Act implements the European Product Liability Directive (Directive (EU) 2024/2853) and establishes strict, far-reaching liability for hazardous products, exposing the insured busi- ness sector in Germany to substantial liability risks and making product liability law a key exposure for Germany’s manufacturing industry. Directors’ & Officers’ Liability Unlike in most other jurisdictions, German corporate liability law provides that the directors and officers of a company are liable for damages to the company they manage if their decisions culpably cause losses to the company or give rise to third party claims for damages against it. According to the settled case law of the Federal Supreme Court, the company’s super- visory board is obliged to pursue such claims against the members of the management board. If it fails to do so, the members of the supervisory board themselves are exposed to a personal liability risk. This framework results in considerable D&O liability exposure for the members of a company’s management bodies. Cyber, AI and Business Interruption Risks By way of illustration, Allianz Group’s annual Risk Barometer 2026 identifies cyber-incidents as compa- nies’ leading global risk, followed by AI-related risks and business interruption, including supply chain disruption. Each of these factors has the potential to translate into liability exposures for insureds. 5.2 Shifting Risk Landscape Distress Disputes The currently challenging economic environment in Germany has led to an increase in cases of director liability in connection with insolvency. In 2025 alone,
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