SWITZERLAND Law and Practice Contributed by: Jodok Wicki, Daniel Zemp, Fabienne von Moos and Doruntina Dembogaj, CMS von Erlach Partners Ltd
liability programmes where several jurisdictions regu- late the transaction. Middle Eastern instability and US–China trade tensions also affect political risk, D&O and professional indemnity. 7.2 Sanctions and Payment Challenges Regulatory Framework The framework rests on the Embargo Act, with SECO enforcing sanctions and FINMA supervising compli- ance structures at regulated entities. FINMA does not itself enforce sanctions but expects adequate compli- ance governance. Under a standard sanction limitation and exclusion clause referring to UN, EU, UK and US sanctions, an insurer may decline to pay a claim where payment would expose it to foreign sanctions risk. A court would analyse such clause under Swiss contract- interpretation principles and not treat it as unusual or unenforceable. Depending on the wording, insurers may simply hold back a payment or clauses may also The practical difficulty is deciding when payment falls within sanctions, particularly for goods-related restric- tions and indemnity, reinsurance or broker payments linked to sanctioned trade flows. FINMA’s Risk Moni- tor has highlighted the complexity of goods-related sanctions. Delays, suspended payments pending review and disputes over sanctions, limitation and exclusion clauses (SLECs) are becoming more com- mon as insurers use dedicated sanctions-compliance teams to screen claims and track changes. Operational Impact The Ukraine Ordinance was last amended on 19 August 2026, so the position remains dynamic. Claims teams should record the legal basis for withholding or suspending payment and distinguish a prohibited payment from a covered loss whose remittance is temporarily blocked. 7.3 War, Political Risk and Exclusions Current Judicial Position Swiss courts have not directly interpreted war, terror- ism or political-risk exclusions in the context of the Ukraine conflict or recent Middle Eastern hostilities. operate effectively as exclusions. Claims-Handling Consequences
Exclusion clauses – including references to “war”, “terrorist act” or “strike” – are interpreted under the standard Swiss contract methodology. An exclusion is not unusual merely because it restricts the scope of cover. Clearly worded war and terrorism exclu- sions will generally be upheld, provided they satisfy the specificity and unambiguity requirements of Article 33 of the ICA. Market Response Swiss law distinguishes war exclusions in standard commercial policies from affirmative political-risk products, which may cover expropriation or selective state obstruction. Insurers are refining war, terrorism and political-violence wordings to address hybrid threats and clarify the boundary between conventional war, cyber operations and state-sponsored disruption. 7.4 Supply Chain and Systemic Loss Events Policy Wording Remains Decisive Supply-chain instability and energy-market volatility are of major impact also on the Swiss economy but have not yet produced a distinct body of Swiss case law on new insured-loss categories or aggregation. Aggregation Questions Whether disruptions arising from one sanctions regime or conflict are a single occurrence depends on the pol- icy’s “occurrence” or “event” definition and applicable limits and sublimits. As already stated, Swiss law does not provide for default aggregation rules. Practical Experience The market has seen more enquiries and pre-litigation disputes about energy prices, raw-material shortages and delayed deliveries linked to sanctions or conflict. Most have been resolved through negotiation and claims adjustment rather than proceedings, which may explain the limited published case law. 7.5 Forward Outlook and Market Response Regulatory and Supervisory Pressure Over the next 12 to 18 months, geopolitical uncer- tainty is likely to affect Swiss underwriting, wordings and disputes. Heightened macro-economic and geo- political tensions and rising sanctions risks will keep influencing the market.
237 I NSURANCE L I T IGATI O N 2026
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