SWITZERLAND Law and Practice Contributed by: Jodok Wicki, Daniel Zemp, Fabienne von Moos and Doruntina Dembogaj, CMS von Erlach Partners Ltd
claims require careful treatment of reasonable costs, sublimits, compensation, defence and regulatory pen- alties. Swiss law generally does not insure fines. Coverage for cyber claims also often raises issues of pre-contractual non-disclosure or misrepresentation (Articles 4 and 6 of the ICA), for instance relating to the existence of MFA or patching of the systems. 4.4 Aggregation and Limits of Liability Aggregation Contract-Driven Swiss law does not provide for a rule dealing with aggregation. The wording of the concerned policy or policies are decisive, therefore, whether losses spanning several years are combined. This can be particularly relevant, for instance, where data protec- tion issues create losses to individuals over different years, or where breaches of duties materialise over an extended period: eg, defective products or environ- Sanctions disputes raise two separate questions: whether the policy covers the loss and whether payment would be unlawful. The policy should be checked for sanctions, war, terrorism and criminal- ity exclusions, as well as mandatory rules and the destination and purpose of payment. Under Article 14, paragraph 1 of the ICA, insurers are generally not liable for wilful acts, and wordings commonly exclude wilful or criminal conduct. Fines, Penalties and Payment Restrictions Swiss law generally treats fines and penalties as uninsurable; cover may be void and may expose the insurer to allegations of assisting an offence. Punitive damages are not available under Swiss law. 4.6 Late Payment and Claims Handling Practices Under Article 41 of the ICA, payment is due no later than four weeks after the insurer receives the infor- mation needed to investigate and verify the claim. In particular, if differences between the parties mate- rialise during claims handling about the information and documentation that has to be disclosed, it will be highly fact-specific whether a claim is due and mental pollutions (in particular PFAS). 4.5 Sanctions and Illegality Issues Illegality Limits Recovery
since when. If liability is disputed, Article 41a of the ICA permits the person entitled to demand the undis- puted amount after the same period. Late payment may attract interest at 5% per year and, if proved, additional loss caused by the delay. Punitive damages are not available under Swiss law. 4.7 ESG and Climate-Related Coverage Climate Risk Tests Existing Cover Swiss courts are likely to approach ESG and climate disputes through familiar coverage questions rather than a distinct ESG doctrine. Regulatory require- ments and client expectations may affect placement facts, the insured activity and the drafting of exclu- sions or endorsements. Important exposure will relate to defence cost coverage. The result will depend on wording, intention and evidence of loss. Relevant exposure will relate primarily to defence cost cover- age for professional indemnity (PI) and D&O policies. Disclosure, Exclusions and Endorsements Insurers may separate physical damage, business interruption, liability, transition and reputational conse- quences through definitions, sublimits or exclusions. 4.8 Delegated Authority and Claims Responsibility Authority Must Be Matched by Evidence The analysis turns on who represented whom and what authority was granted. A broker normally represents the policyholder in placing the risk; it is not thereby the insurer’s underwriting or claims agent. A manag- ing general agency (MGA) or third-party administrator (TPA) with binding or claims authority may bind the insurer within that mandate, while authority limits and escalation requirements may be decisive. The policy, placement record, binding authority, claims mandate and communications should show who could bind the insurer, issue endorsements, decide cover, settle or reserve rights. Mandates, Conduct and Reinsurance Delegated arrangements exist particularly in interna- tional and specialist programmes, but conventional brokers and external adjusters under limited mandates remain common. Parties should verify the structure and Insurance Supervision Act (ISA)/Financial Market Supervisory Authority (FINMA) status. Swiss super-
232 I NSURANCE L I T IGATI O N 2026
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