GERMANY Law and Practice Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
8.5 Social Media Risk Risks connected with social media addiction and related mental health effects currently do not form a standalone insurance category in Germany, but an emerging liability cluster. The EU is launching a strategy aimed at regulating the architecture of social media platforms and search engines, targeting both their designs and algorithms as well as the contents hosted. This interlocks with the EU Product Liability Directive (EU 2024/2853) adopted in October 2024 which integrates digital technologies, AI systems and software into the product liability regime. Its transformation into German national law is to be concluded by the end of 2026. Recent developments in the US may serve as an instructive signpost for potential claims in Europe, such as the multi-billion-dollar settlement between Meta and several US states over claims that its plat- forms Instagram and Facebook were deliberately designed to be addictive and are causing mental harm. Central questions will be to what extent the architec- ture of online platforms is part of the “product”, and to what extent the distribution of harmful content pushed by those platforms’ algorithms may result in product liability claims. Against these growing liability risks, it is to be expect- ed that insurers will scrutinise policyholders’ prod- ucts more closely, asking tougher questions during the underwriting process before deciding which risks may be insured, to what extent, and against which premium. 8.6 Next Generation Nuclear Earlier this year, the European Commission adopt- ed a strategy to accelerate the development and deployment of Small Modular Reactors (SMRs) and Advanced Modular Reactors (AMRs) in Europe, look- ing to establish first reactors by the early 2030s. Against this timeline, it is currently too early to reliably predict future market reactions to this new technology, much less its impact on insurance disputes.
Peru, and litigation brought by environmental NGOs seeking to prohibit the sale of combustion-engine vehicles by a German OEM (dismissed by the Federal Supreme Court in 2023). 8.3 Data Protection Laws The GDPR has tightened the liability framework for companies that lose or improperly disclose personal data. The German Federal Supreme Court has ruled that even a brief loss of control over customer data can constitute compensable non-material damage under Article 82 (1) of the GDPR without proof of actu- al misuse. Therefore, the lowered damage threshold shifts the defence focus from whether harm occurred to proving the absence of a GDPR violation and con- testing the quantum of damages. In light of rising cyber-attacks, insurers must increas- ingly account for the risk of mass damages whenever customer data is compromised. BaFin has empha- sised the highly dynamic risk landscape and signifi- cant accumulation risk in the cyber-insurance market: a single cyber-event, such as an attack exploiting a widely used software vulnerability, can trigger simul- taneous claims across numerous policyholders. BaFin therefore recommends prudent rate-making and ade- quate reinsurance protection. 8.4 Data Centres Data centres are among the highest-value single-site risks in commercial insurance. Construction costs for a single next-generation facility can reach multi-billion amounts and even increase once GPUs and other technology are installed. From an underwriting perspective, the key challenge is that power, cooling and backup systems are tightly interconnected. A failure in one can quickly cascade across the entire facility. Power supply is the largest single driver of outages. Novel technologies such as lithium-ion battery backup units creating new fire igni- tion sources are only adding hazards with limited loss history. Risk selection is therefore critical. Insurers conduct facility-specific risk assessments, examining physical architecture and redundancy design as well as the day-to-day operational practices and safety protocols.
139 I NSURANCE L I T IGATI O N 2026
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