SWITZERLAND Law and Practice Contributed by: Jodok Wicki, Daniel Zemp, Fabienne von Moos and Doruntina Dembogaj, CMS von Erlach Partners Ltd
CMS Switzerland Dreikönigstrasse 7 PO Box
8022 Zurich Switzerland
Tel: +41 44 285 11 11 Fax: +41 44 285 11 22 Email: contact@cms-vep.com Web: cms.law
1. Key Drivers and Resolution of Insurance Disputes 1.1 Common Triggers of Insurance Disputes Where Disputes Start Swiss insurance disputes most often begin with a disagreement about whether the reported event falls within the insured risk. Further recurring issues include the scope of exclu- sions, causation, the valuation of loss, deductibles, policy limits and the allocation of cover across several policies and policy years. Late notification (Article 38 of the Insurance Contract Act (ICA)), pre-contractual non-disclosure or misrepresentation (Articles 4 and 6, ICA), and the handling or timing of a payment – which generally becomes due four weeks after the insurer has received sufficient information to satisfy itself as to the validity of the claim (Article 41, ICA) – can turn an otherwise manageable claim into a coverage dis- pute. Swiss law requires exclusions to be specific and unambiguous (Article 33, ICA) and resolves genuine ambiguity in favour of the insured, making the draft- ing quality of policy conditions a frequent source of contention in itself. Main Sectors or Lines of Business Coverage disputes can arise across all lines of insur- ance. The main areas are: • property and business interruption; • motor and general liability;
• construction; • professional indemnity; • directors’ and officers’ cover; and • health or accident insurance.
In liability work, the parties often debate the policy trigger – which may be structured on an occurrence or claims-made basis under Swiss law – the contractual duty to defend, defence costs and whether a loss is excluded because it was intentionally caused or oth- erwise falls outside the insurer’s liability under Article 14 of the ICA. Reinsurance disputes follow a different pattern: the ICA does not apply to reinsurance, which is governed primarily by the Swiss Code of Obligations (CO) and the parties’ contractual arrangement, and disputes focus more on ceded risk, aggregation and attribu- tion to policy years, attachment points and claims co- operation than on policyholder protection. Recent Shift The pattern has broadened as insured risks have become more interconnected and policies more lay- ered and bespoke. Large losses increasingly involve several insurers, brokers, insured entities or jurisdic- tions, while cyber incidents, supply-chain disruption, sanctions and environmental contamination (notably PFAS) test traditional wordings. The 2022 partial revision of the ICA introduced a gen- eral direct action right for injured third parties against liability insurers (Article 60, paragraph 1bis), adding
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