INTRODUCTION Contributed by: Emma Ager, Clyde & Co LLP
valuation and policy scope. Oman has responded by expanding compulsory natural catastrophe protection within motor insurance, illustrating how regulators are increasingly intervening to address climate-related exposures. There is a growing concern too regarding environ- mental claims involving hazardous substances such as PFAS – for example, this is a major source of cover- age disputes in the USA. Climate-related disputes frequently raise difficult questions regarding aggregation, business interrup- tion, valuation and policy trigger. Insurers are respond- ing through more detailed underwriting, revised exclusions, sub-limits and increasingly sophisticated catastrophe modelling. Environmental liabilities represent another significant area of development. The growing importance of ESG-related obligations is causing particular concern. France, Denmark, the UAE, the UK and the USA all report increasing scrutiny of sustainability disclosures, climate governance and environmental reporting. Directors and officers are facing greater exposure to claims arising from alleged greenwashing, inadequate climate-risk management and failures in sustainability reporting. While ESG litigation remains (or appears to remain, as far as it is possible to tell) relatively limited in some jurisdictions, such as India, Japan, Mexico and Oman, contributors generally expect ESG claims to become more prominent as disclosure obligations expand and regulatory scrutiny intensifies. The introduction of climate-related reporting requirements in jurisdic- tions such as the UAE and France is likely to accel- erate this trend – the latter reports that directors are exposed to claims arising from a failure to implement credible transition plans too. Geopolitical Instability and Global Supply Chains Geopolitical instability and war have become one of the defining influences on insurance disputes in recent years. Contributors from various jurisdictions all iden- tify sanctions, political violence, war-risk exposures and supply-chain disruption as increasingly important sources of litigation.
Marine, cargo and logistics insurance appear particu- larly affected. In the Middle East, increasing disputes concerning cargo rerouting, port congestion, stor- age issues, delay-related losses and the interaction between marine, construction and project insurance programmes are being reported, most especially from troubles in the Strait of Hormuz. These disputes often turn on complex questions regarding causation, tim- ing, policy trigger and the allocation of losses between multiple policies. The UK similarly reports substantial litigation arising from sanctions, aviation losses, political risk claims and geopolitical disruption. The aviation disputes arising from aircraft retained in Russia following the invasion of Ukraine have generated significant judi- cial consideration of war-risk provisions, confiscation clauses and reinsurance recoveries in recent years. Sanctions-related disputes have also become increas- ingly common. Several jurisdictions report growing challenges arising from overlapping sanctions regimes and the practical difficulties associated with cross- border payments. Even where coverage is accepted, insurers may face obstacles in processing payments through international banking systems or recovering funds from reinsurers subject to different regulatory regimes. Cyber warfare adds further complexity. Increasing attention is being turned to cyber war exclusions and questions concerning attribution. As cyber operations become more sophisticated and state involvement becomes harder to establish, disputes concerning the application of traditional war exclusions are likely to increase. Canada has reported potential “tariff washing” claims, where companies or directors miscommunicate or omit material information regarding tariff impacts, mitigation strategies and financial implications. Com- panies may struggle to keep track of an ever-evolving tariff landscape. Policy Wording; Aggregation As with prior years, perhaps the most consistent theme across all jurisdictions is the central importance of policy wording.
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I NSURANCE L I T IGATI O N 2026
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