DENMARK Law and Practice Contributed by: Josefine Movin Østergaard and Johannes Hedegaard, Bruun & Hjejle
• notification and remediation cost coverage. 4.4 Aggregation and Limits of Liability Aggregation and liability limit disputes arise most fre- quently in professional indemnity and liability insur- ance, where multiple claims may stem from a single underlying act, error or omission. Section 91 of the Danish Insurance Contracts Act ( forsikringsaftalel- oven ) establishes the foundational principle that a liability insurer must pay if a covered event occurs during the insurance period, even where harm mate- rialises later. This occurrence-based framework raises questions about what constitutes a single “event” for policy limits and aggregation purposes. In practice, aggregation disputes tend to arise in the following contexts: • professional liability claims where an adviser has given similar erroneous advice to multiple clients; • product liability claims affecting multiple claimants; and • financial crime scenarios where a single scheme produces losses across many victims. The court proceedings arising from the Danske Bank Estonia money-laundering matter, which became pub- lic in 2018 and led to multiple investor claims from 2019 onwards, involved related alleged disclosure fail- ures. These proceedings raised complex questions about whether such claims constitute a single occur- rence or multiple occurrences for insurance purposes. 4.5 Sanctions and Illegality Issues Sanctions and illegality considerations are increasing- ly relevant to coverage disputes in Denmark, reflect- ing EU sanctions regimes and domestic regulatory requirements. In the insurance context, sanctions issues may arise in several ways: • insurers may be legally prohibited from paying sanctioned persons or entities; • policy terms may contain sanctions exclusion clauses voiding coverage where performance would expose the insurer to sanctions; and
• reinsurance arrangements may be disrupted where a reinsurer is subject to a different sanctions regime. For insurance intermediaries providing life or invest- ment-related insurance, the Danish Anti-Money Laun- dering Act ( hvidvaskloven ) requires enhanced due dili- gence and sanctions screening. Published Danish case law on the intersection of sanc- tions and insurance coverage remains limited, but the market trend mirrors that across the EU. Insurers are introducing broader sanctions exclusion clauses, and the legal uncertainty surrounding their enforceability – particularly where they purport to override statu- tory indemnity obligations under the Danish Insurance Contracts Act ( forsikringsaftaleloven ) – is likely to gen- erate disputes. Public policy considerations under Section 36 of the Danish Contracts Act ( aftaleloven ) may also be invoked where enforcement would require conduct contrary to mandatory law or public order. 4.6 Late Payment and Claims Handling Practices Under Section 3 b of the Danish Insurance Contracts Act ( forsikringsaftaleloven ), insurers must, upon request, provide a written, reasoned explanation when declining to underwrite or terminating a policy. Section 25, read with Section 24 (1), obliges insurers to inform the insured of the right to interim payment of the undisputed portion no later than three months after notification of the insured event. Particularly in a consumer context, claims handling practices face increasing scrutiny. The Danish Insur- ance Complaints Board ( Ankenævnet for Forsikring ) has shown willingness to find against insurers who: • provide inconsistent reasons for denial; • withdraw coverage without legitimate grounds; • impose procedural requirements that diminish cov- erage beyond the policy terms; or • delay decisions unreasonably.
93 I NSURANCE L I T IGATI O N 2026
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