SWITZERLAND Law and Practice Contributed by: Jodok Wicki, Daniel Zemp, Fabienne von Moos and Doruntina Dembogaj, CMS von Erlach Partners Ltd
a new dimension to dispute dynamics, particularly in directors’ and officers’ (D&O) and professional liability. 1.2 Role of Policy Wording and Drafting Interpretation of Insurance Contracts Policy wording is central to Swiss coverage disputes. Swiss law does not operate under a strict doctrine of binding precedent, and the interpretation of each case therefore turns closely on the specific language agreed by the parties and the circumstances of the individual case. Swiss law applies first a subjective interpretation approach asking for the true intention of the parties. Underwriting files, in particular any correspondence with the insured or its broker, are key evidence for alleged true intention. If such intention cannot be determined, the presumed intention of the parties must be established (objective interpretation). The policy is read as a whole, taking account of the par- ties’ knowledge, professional experience, negotiations and the involvement of an experienced broker. If, at this step, a decisive meaning of an exclusion is still not clear, the exclusion shall be interpreted in the way that is more favourable to the insured ( Unklarheitsregel ). This rule of ambiguity only applies subsidiarily if all other means of interpretation fail. Recurring Clauses and Areas of Contention Problems recur, for example, where policies import English-law labels such as “warranty” or “condition precedent”, in the English law meaning, without stat- ing the intended legal consequence under Swiss law. Under Article 45 of the ICA, a breach of an insured’s duty does not automatically defeat cover: depending on the applicable provision, the insured’s fault and the extent to which the breach affected the occurrence or extent of the loss may matter, so a label alone seldom provides a decisive defence. Late-notice, co-operation and consent clauses are a regular source of contention, particularly where they do not address the consequences of partial compli- ance or of a breach that had no material effect on the occurrence or extent of the loss. Exclusions and endorsements that do not clearly identify the excluded event or conduct, or that sit uneasily with the policy’s
definitions, sublimits, aggregation language and trig- ger, are other recurring problems. As policies become more layered and bespoke, the coherence of the pro-
gramme as a whole is increasingly tested. 1.3 Dispute Resolution Strategy and Outcomes From Claim to Dispute
Most matters begin with notification, a coverage assessment and a payment decision or reservation of rights. The parties then test the position through written submissions, expert input and settlement dis- cussions before commencing formal proceedings. Consumers and smaller businesses may turn to the Swiss Insurance Ombudsman, whose opinions are not legally binding but carry practical weight and can help resolve disputes without recourse to the courts. Conciliation and mediation offer further routes to resolve a dispute without a judgment. Different Dispute Profiles For consumers and smaller businesses, standard policy wordings, limited resources and the value of a prompt payment favour early resolution and care- ful claims handling. Commercial disputes more often involve brokers, negotiated programmes, several lay- ers and technical evidence, making formal proceed- ings or a contractually agreed dispute-resolution pro- cess more likely when discussions stall. Reinsurance and international disputes follow a dif- ferent logic: the ICA does not govern reinsurance, specialised market practice plays a greater role, and confidential arbitration and, in some cases, expert determination are common for high-value claims. Outcomes and Costs Early resolution keeps costs manageable and pre- serves commercial relationships but depends on a clear and robust coverage position and a willing- ness on both sides to engage. Court proceedings in Switzerland are predominantly written, although oral hearings and oral evidence also play a role, and cost orders follow the loser-pays principle, although recov- erable legal costs are often well below the actual fees incurred and are generally calculated under cantonal tariffs rather than on a full indemnity basis.
227 I NSURANCE L I T IGATI O N 2026
CHAMBERS.COM
Powered by FlippingBook