GERMANY Law and Practice Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
The increase in risk exposure may also translate into changes to pricing, capacity and risk selection. While, for example, insuring risks connected with economic activities in Russia had not been a concern prior to the invasion of Ukraine, insurers’ appetite for such risks has vanished. Consequently, policies may shift to higher attachment points, lower sublimits and nar- rower territorial scope, while underwriting could rely on more detailed questionnaires directed at policy- holders. 8. Emerging Risks 8.1 Market Overview of Emerging Risks We are seeing a cluster of emerging risks that, taken together, are materially reshaping the disputes and advisory landscape for insurers and corporate poli- cyholders in Germany. • The difficult economic environment has caused a rise in insolvency-linked D&O liability and trans- action risk. With respect to D&O cases, this is driven primarily by the personal liability of man- aging directors for payments made after insol- vency. Regarding transactions, the development, inter alia, puts stress on W&I Insurance since the acquisition of a financially distressed business unit places high demands on a thorough due diligence process. • Energy-market volatility and broader geopolitical instability are generating political risk and business interruption scenarios, with sharp price swings and disrupted distribution networks creating a highly error prone environment and corresponding liability exposure. • Cyber and AI, together with associated compli- ance risks, are also increasingly important as the EU tightens regulation through instruments such as NIS 2 and the AI Act. The interplay between complex regulatory duties and pervasive digitalisa- tion is a growing source of compliance, liability and coverage questions, particularly around regulatory fines, data breaches and algorithmic decision mak- ing. The fragmented and highly complex nature of these issues cannot reasonably be covered completely
by the in-house capacities of many companies. As a result, external expertise in complex coverage liti- gation, wording reviews and strategic risk advisory is increasingly being introduced, not least to ensure that business decisions taken by decision-makers are properly supported and defensible. 8.2 Impact of ESG on Underwriting and Insurance Litigation Climate change is driving both loss trends and cover- age disputes. For example, according to GDV, annual natural hazard losses (eg, floods, wildfires) rose from EUR1.4 billion in 2009 to EUR2.4 billion in 2025. This claims pressure has translated into more restrictive claims handling and an expanded catalogue of duties andobligations in policy wordings. As insureds are confronted with stricter compliance requirements and more intensive scrutiny of their risk management, the number of coverage disputes over alleged breaches of obligations of NatCat coverage is noticeably increas- ing. At the same time, insurers are reacting to emerging environmental loss drivers by tightening exclusions. PFAS is a prominent example: in the German market, carriers have increasingly moved to exclude PFAS- related risks from cover altogether, as reflected in GDV’s clause recommendations for general liability, product liability and environmental impairment liability insurance. This raises difficult questions around dis- closure, risk presentation and the scope of residual cover, and is becoming a recurring topic in wording negotiations and advisory work. Climate-change risks also significantly increase the risk exposure of reinsurers, and in contentious mat- ters frequently trigger, for example, disputes over the interpretation and application of aggregation clauses in reinsurance contracts. On the liability side, ESG-driven theories of respon- sibility are beginning to surface. While Germany has not yet seen the same volume of climate litigation as some other jurisdictions, the first “disruptive” cases are being heard before the German courts. These include a dismissed claim before the Appeal Court of Hamm by a Peruvian farmer against a German energy company for climate-related environmental damage in
138 I NSURANCE L I T IGATI O N 2026
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