SWITZERLAND Law and Practice Contributed by: Jodok Wicki, Daniel Zemp, Fabienne von Moos and Doruntina Dembogaj, CMS von Erlach Partners Ltd
coverage, causation, settlement and fraud decisions. There is currently no general Swiss law requirement to disclose the use of AI tools in preparing submissions, but regulated institutions using AI remain subject to applicable governance, risk-management and docu- mentation requirements. Insured-Side Risks Insureds face parallel challenges when responding with automated tools. Claims, data protection, IT and defence teams should co-ordinate preservation, access and authentication protocols. A defensible record of why a claim was paid, challenged or inves- tigated remains essential: AI can accelerate handling, but it does not remove the need to prove the insured event, loss, liability and causation. 6. Third-Party Claims and Defence Trends 6.1 Third-Party Claims and Direct Actions Direct Action Rights Under the ICA The partial revision of the ICA, effective 1 January 2022, introduced a general direct action right for injured third parties against liability insurers under indemnity insurance policies (Article 60, paragraph 1bis of the ICA). Previously, no such general right existed under the ICA; direct claims were limited to specific statutory regimes, most notably motor vehicle liability insurance (Article 65 of the SVG). Scope and Limitations The new direct action right is subject to the exist- ence and limitations of the relevant insurance policy. The insurer may raise against the injured third party all defences and objections available under the law or the insurance contract, including coverage exclusions, sublimits, late notification and policy conditions. The right is purely compensatory and does not give rise to any punitive element. Recent Case Law In its decision of 27 January 2025 (BGE 151 III 35), the Swiss Federal Supreme Court held that Article 60, paragraph 1bis of the ICA does not apply retroactively to contracts concluded before 1 January 2022. Article 103a of the ICA is exhaustive and does not preserve
the direct action for those contracts. This matters for long-tail policies written before 2022: the damaging event’s later date does not by itself create a direct action. Common Areas of Application Direct actions are established in motor liability and are increasingly relevant in professional liability and D&O insurance, subject to the policy and transitional rules. 6.2 Emerging Liability and Defence Trends Insurers’ interest in controlling counsel, settlement and costs may conflict with an insured’s need to protect its reputation and business relationships, especially in D&O proceedings and regulatory investigations. Switzerland has no class- or group-action procedure comparable to the US model or the EU representative actions regimes (for example, in the Netherlands), but limited procedural co-ordination, consumer protection mechanisms and representative actions by associa- tions can concentrate claims. 7. Geopolitical Factors 7.1 Geopolitical Drivers of Insurance Disputes Indirect Geopolitical Exposure Geopolitical developments affect Swiss insurance disputes mainly indirectly. The Russia–Ukraine con- flict and the resulting Swiss sanctions regime have affected the availability of cover, the movement of premium and claim funds, and willingness to assume risks connected with affected jurisdictions. Sanctions and Affected Lines Switzerland is outside the EU and EEA and decides independently whether to adopt EU sanctions. Swit- zerland adopted EU sanctions against Russia from February 2022 under the Embargo Act ( Embargoge- setz , or EmbG), administered by the State Secretariat for Economic Affairs (SECO). The Federal Council has continued to align the Swiss sanctions regime with EU packages, most recently the 20th package adopted on 19 August 2026 and effective from 20 August 2026, covering asset freezes, financial services and goods trade. Disputes arise particularly in reinsurance, avia- tion, marine and cargo insurance and international
236 I NSURANCE L I T IGATI O N 2026
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