GERMANY Trends and Developments Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
Cyber-insurance is another novel insurance line, with typical issues around definitional ambiguities in trig- gers for coverage and pre-contractual disclosure duties. Disputes often revolve around questions that intersect at the level of policy wording and techni- cal issues, most prominently insureds’ obligations to maintain state-of-the-art IT security to prevent secu- rity breaches. Future claims will likely also centre on issues of causation. With cyber-attacks becoming not only more frequent but also steadily more severe, cyber-insurance will certainly not lose any of its sig- nificance going forward. Due to its nature, cyber-insurance is also confronted with the rapid non-stop evolution of AI technology. In the past, cyber-attacks were dependent on the input of human hackers which limited the potential extent and number of consecutive attacks to a certain extent. According to reports in August 2026, however, a net- work of 1,200 AI agents independently, and without human support, coordinated a chain of attacks on dif- ferent IT systems – which, ironically, was detected by an AI defence. This new dimension of AI-influenced cyber-risk raises the question as to the type of secu- rity and prevention measures to be demanded from policyholders so as not to compromise coverage. It also illustrates how cyber-insurance, compared to traditional lines of insurance, has a higher need to constantly adapt to technological progress – or estab- lish a policy wording that is both precise and flexible enough to keep up with developments. In Germany, these two “new” lines of insurance both still lack a settled body of case law. The respective policy wordings are in their early stages and evolving quite quickly. Consequently, many line-specific legal issues are notyet resolved, and leave room for discus- sion and even disputes. Liability and Insurance Dispute Drivers Even in the more traditional lines of insurance, expo- sures are increasingly driven by global emerging risks and by the – in many cases corresponding – tightening of the legal framework. ESG- and Climate-Related Risks Climate change and the resulting natural catastro- phes put a particular strain on property and related
business interruption insurance. In Germany, heavy rainfall, flooding and wildfires now occur much more frequently and intensively than they have in previous decades. In July 2021, a historic flood hit a region in the Ahr valley, tragically killing 135 people and destroying about 9,000 houses and 60 bridges. While insurers have settled almost all compensation claims now, the catastrophe has sparked a debate over whether, and to what extent, natural disaster insur- ance should be rendered mandatory by statute, or whether an “opt-out” system should be implemented. Insurers have also called for state-backed reinsurance mechanisms. In general, the increase in natural dis- asters has prompted insurers to scrutinise the scope of coverage much more closely, especially contesting the causation between specific events and loss, and relying much more on policy wording. Furthermore, courts are seeing an increase in envi- ronmental liability actions. While ESG-related claims are only starting to emerge in Germany, the first cases have been concluded elsewhere. For example, with the support of a German NGO, a Peruvian farmer sued German energy giant RWE, claiming its carbon emis- sions increased the risk of flooding in Peru. Notably, while the farmer’s claim was dismissed because of lack of proof that his field was indeed threatened by flooding, the Hamm Appeal Court ruled that major corporations could, in principle, be held liable for their contribution to climate change and natural hazards (Hamm Appeal Court, decision dated 28 May 2025 – 5 U 15/17). Tightening of Liability Law Current legal reforms are also expected to expand liability exposure for insureds and their insurers. Product liability, for example, is about to be rein- forced with the transformation of EU Product Liabil- ity Directive (EU 2024/2853) into German law by the end of 2026. Among other modifications of the law, digital technologies, AI systems and software will be expressly integrated into the product liability regime, broadening the legal concept of “products” and the strict liability for their failure. In addition, the Corporate Sustainability Due Diligence Directive (CSDDD) requires large companies to iden-
144 I NSURANCE L I T IGATI O N 2026
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