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The impact of Covid-19 on the global insurance industry – Germany

Monday 11 July 2022

Peter Etzbach
Oppenhoff, Germany
peter.etzbach@oppenhoff.eu

Sebastian Gutmann
Oppenhoff, Germany
sebastian.gutmann@oppenhoff.eu

Germany

General questions

Yes/

No/

N/A

Additional comments, if any.

1

Does the country that you are reporting on follow common law jurisprudence?

No

German law is generally a code law, however, higher court rulings are generally regarded as a strong guidance for matters disputed in the legal community, albeit not binding.

2

If the answer to the above question is no, does the country you are reporting on follow a civil code? Please describe the judicial system in short.

Yes

The drafting of insurance contracts as well as the private insurance jurisprudence is based on the German Civil Code (Bürgerliches Gesetzbuch, BGB) and the German Insurance Contract Act (Versicherungsvertragsgesetz, VVG).

German law in general is less case law-based as in common law jurisprudence. Courts are free to interpret the codified law pursuant to their own legal understanding. However, the decisions of the Federal Court of Justice (Bundesgerichtshof, BGH) as the highest civil court in Germany have to be considered by the lower civil courts. If a lower court in Germany, such as local courts (Amtsgerichte, AG), regional and higher regional courts (Landesgerichte, LG, Oberlandesgerichte, OLG) decides a case in clear disagreement with a prior decision of the Federal Court of Justice, this typically entitles the lawsuit’s parties appealing the decision. Therefore, German jurisprudence merges case law and pure interpretation of statutory provisions.

3

Please provide a brief description of the legal framework applicable to insurance coverage disputes in the country you are reporting on. In so doing, please consider the following questions:

The statutory legal framework in Germany consists of:

  • German Insurance Contract Act (Versicherungsvertragsgesetz, VVG);
  • German Civil Code (Bürgerliches Gesetzbuch, BGB);
  • German Code of Civil Procedure (Zivilprozessordnung, ZPO);
  • Insurance Contract Act Information Ordinance (Verordnung über Informationspflichten bei Versicherungsverträgen, VVGInfoV);
  • Introduction Law Act to the Insurance Contract Act (Einführungsgesetz zum Versicherungsvertragsgesetz, EGVVG); and
  • European Law Acts (eg, Rome-I Regulation, PRIIP, Directive (EU) 2016/97).

4

Does the insured bear the burden of establishing coverage of a claim, or does the insurer bear the burden of establishing no coverage? Please give a short description of the legal basis in your country.

If the insured person asserts an insurance claim, they are obliged to provide evidence for the conclusion of the underlying insurance contract and – if it is not a matter of exclusion clauses – for the content of the contract asserted by the insured person. With regard to the other positive and negative prerequisites of the claim for benefits/compensation, the burden of proof is distributed differently: the occurrence of the insured event in the sense of the primary risk description is subject to the burden of proof of the insured person. If a limitation/exclusion of the risk is contractually formulated as a secondary risk description, the insurer bears the burden of proof for the occurrence of the limitation/exclusion. The insured person, on the other hand, has the burden of proof insofar as the exclusion is reduced (by ‘counter-exceptions’).

5

Are coverage provisions in policies interpreted broadly or is there a presumption in favour of coverage? Please give a short description of the legal basis in your country.

Insofar as the parties are burdened with proof, they must therefore generally provide full proof. According to the case law of the Federal Court of Justice, however, in doubtful cases the judge must be content with a degree of certainty that is useful for practical life and that silences doubts without excluding them completely. Insofar as the evidence cannot be provided directly, circumstantial evidence must be provided. The aim of circumstantial evidence is for the judge to be convinced with sufficient certainty of the existence of the fact in question on the basis of a large number of circumstances, each of which is not fully conclusive in itself. According to case law, this requires an evaluation of the individual pieces of circumstantial evidence as well as a summarised overall view. In individual cases, prima facie evidence may also be admissible. However, this presupposes that there is a typical sequence of events which, according to life experience, points to a specific cause. As far as the proof of the amount of the insured damage is concerned, the insured person benefits from the facilitation of proof according to Section 287 German Code of Civil Procedure. The judge can decide in this respect on the basis of his own conviction. The provision of Section 287 German Code of Civil Procedure is also applicable to the causality between the insured event and the damage.

6

Are exclusions interpreted narrowly or is there a presumption against finding that an exclusion to coverage applies? Please give a short description of the legal basis in your country.

Exclusions are interpreted pursuant to the rules as outlined in the responses to questions 4-6. The insurer bears the burden of proof for the occurrence of objective and subjective risk exclusions. The insurer also bears the burden of proof that its liability is excluded or limited due to an intentional or grossly negligent breach of obligations by the insured person. In this respect, however, the German Insurance Contract Act contains some provisions that reverse the burden of proof with regard to individual requirements. For example, the insured person must prove that the breach of the obligation is not the cause of the occurrence or determination of the insured event or the determination or scope of the insurer’s obligation to pay benefits. The objective facts of the breach of obligation also give rise to the presumption that the insured person acted with gross negligence. The insured person must therefore exonerate themselves in this respect.

7

Are there universally accepted definitions for:

  • event
  • occurrence
  • damage
  • cause
  • originating cause
  • natural peril
  • force majeure
  • loss
  • consequential loss

If the answer is yes, please give a short description of each definition and the legal basis for that definition (ie, a rule of law, case law etc).

Yes

German law does not provide for definitions, but some of the terms have been interpreted by case law. However, any term must be interpreted in the specific context in hand.

event

German policies refer to an ‘insured event’ which is defined in the wording of the policy. The event that gives rise to the insurer’s obligation to provide the insurance benefit. A ‘loss event’ is an act, omission or natural disaster with a damaging effect on property, property groups or rights, which is usually part of the insured event.

occurrence

Used similarly to ‘event’ in reinsurance wordings with English origin.

damage

Damage is very generally defined as a disadvantage caused by diminution or loss of tangible or intangible property (normativer Schadensbegriff).

cause (Kausalität)

An event is causal if it cannot be conceived away without the harmful event being removed (conditio sine qua non).

originating cause

N/A. This could be understood as a close causal proximity of event and loss.

natural peril

‘Nature’ can be understood as ‘everything that exists or develops in organic and inorganic phenomena without human intervention’ and natural peril would be a risk resulting therefrom. The term ‘elementary losses’ is often used in this context to denote that the loss has to be caused by one of the four elements (earth, wind, water, and fire). According to the definition of the German Federal Office of Civil Protection and Disaster Assistance (Bundesamt für Bevölkerungsschutz und Katastrophenhilfe) a natural disaster (often leading to a natural peril pursuant to insurance policies) is a natural event that leads to damage and that cannot be managed with the means of everyday hazard prevention. Natural disasters are characterised by an immediate and physical impact of natural forces on the environment that leads to damage.

force majeure (höhere Gewalt)

As defined by case law of the Federal Court of Justice, a force majeure is an event caused by effects from outside, not foreseeable and unpreventable even by exercising the utmost care that could reasonably be expected.

loss (Schaden)

Usually, loss is calculated via the difference hypothesis (Differenzhypothese) which means a comparison of the financial situation that occurred as a result of the event giving rise to liability with that which would have resulted without that event.

consequential loss ((Mangel-)Folgeschaden)

This term refers to the situation, that a faulty product or any other damage causes damage to different property or (legal) assets of the affected.

As the legal system of Germany does not follow common law, the above expressions and definitions only have partially equivalent terms in contract drafting language and consequently in jurisprudence. The answers try to point these out, even if that means straying away from the predefined terms in this questionnaire.

The definition of insurance-contract related terms is mainly based on Section 1 of the German Insurance Contract Act: The insurer undertakes under the insurance contract to cover a certain risk of the insured person or a third party by providing a certain benefit. Such benefit has to be provided on the occurrence of, or caused by the agreed insured event (Versicherungsfall). The insured event is understood to be the occurrence of the insured risk or, in other words, the event in which the insured risk materialises. The insured risk often materialises through a short one-time event. The condition caused by the occurrence of the risk may also extend over a certain period of time, which determines the duration or scope of the insurance benefit (eg, a business interruption). In this case, it is referred to as a so-called stretched insurance case (gedehnter Versicherungsfall). The insured event results from the specific agreement and the type of insurance and can therefore vary greatly. For example German business interruption insurance policies mostly contain references to the German Infection Protection Act (Infektionsschutzgesetz, IfSG) and provide for an insured event only if the competent authority issues a closing order.

Loss causation

Yes/

No/

N/A

Additional comments, if any.

8

Did the country that you are reporting about issue lockdown, stay-at-home or no-travel restrictions in response to Covid-19?

Yes

In particular, two major lockdowns with far-reaching contact restrictions were imposed. Quarantine measures for travellers from abroad and travel restrictions were adopted and repeatedly restaurant and several other service businesses were closed. Since the summer of 2021, the federal state governments have adapted their strategy to allow only vaccinated, recovered or tested persons into certain public spaces. Recently, in some areas, only people who have received their booster vaccination and those who are doubly-vaccinated or recovered from Covid-19 and can provide a negative test result can visit certain public spaces.

9

If the answer to the question above is yes, were such orders issued nationally, by state/region or by local city/town. Please give a short description of the issuing authority and the orders issued.

The federal government sets the framework conditions, while federal states are responsible for implementation and execution. The exact measures were based on the regional current incidence value (infections per 100,000 inhabitants in the previous seven days). Some states adopted more strict measures that went beyond the decisions of the federal and state government conferences (sometimes including curfews).

10

If the answer to the above question is yes, were the lockdown, stay-at-home or no-travel restrictions mandatory or recommended?

In principle, the measures were mandatory. However, there were exceptions for certain key professions and, since 2021, for vaccinated and tested people.

11

If the country that you are reporting about did issue lockdown, stay-at-home or no-travel restrictions, were those orders suspended or revoked at any point in time? If the answer is yes, please give a short description of the timeline.

No

There were different measures at different times, which ended over time or by the numbers falling below certain incidence values. For example, with the second lockdown, a gradual easing of the regulations was made, dependent on a stable incidence of below 50 of new infections per 100,000 inhabitants in a state or region.

12

If the answer to the above question is yes, were subsequent lockdown, stay-at-home or no-travel restrictions issued at any point in time? Please give a short description of the timeline.

N/A

The first lockdown lasted from spring to summer 2020. In November 2020, there was a ‘light lockdown’ in place which included contact restrictions and the temporary closure of restaurants, followed by a lockdown containing strict contact restrictions from December 2020 to March 2021. From April until the end of June 2021, the so-called ‘federal emergency brake’ regulation (Bundesnotbremse) was applied with contact restrictions.

13

Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss?

No

The Federal Government of Germany (Bundesregierung) has not issued any official guidance on whether Covid-19 is a ‘cause’ of an insured loss or not. However, the German Infection Protection Act has been amended, with Covid-19 being added to the list of notifiable diseases to be notified to the local health authority.

This amendment can have indirect effect on the assessment as to whether Covid-19 has to be classified as a ‘cause’ of insured loss. For example, some business interruption insurance policies include dynamic references to the German Infection Protection Act, meaning that the reference always applies to the version of the German Infection Protection Act in place during the term of an insurance contract). This means that if a business has been interrupted due to the impact of Covid-19 (such as closure orders by authorities), the insured can possibly claim coverage under an insurance contract containing such dynamic German Infection Protection Act reference.

14

Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance.

No

On 26 January 2022, the German Federal Court of Justice (Bundesgerichtshof) issued a decision on a clause within a professional business interruption insurance policy (BGH IV ZR 144/21). The clause in question referred to the German Infection Protection Act in a static manner (non-dynamic, see also the response to Question 13) and listed certain covered diseases. As of that time, the German Infection Protection Act did not contain Covid-19. The German Federal Court of Justice ruled that the average insured person cannot conclude that Covid-19 is covered from such a static clause. In this regard, it was stated that diseases and pathogens not listed in the referred catalogue, which like Covid-19 do not occur until years after the conclusion of the contract and for which it is not possible for the insurer to make an appropriate premium calculation due to the uncertainty of the liability risk, are not covered. Furthermore such a static reference would be clearly understandable for the average insured person and therefore does not violate the German GTC transparency requirement (Transparenzgebot) of section 307(1) of the German Civil Code (BGB) Therefore, a claim against the insurance company was denied. The Federal Court of Justice however also stated that any ruling is highly depended on the individual case and clause.

Moreover, numerous decisions by regional and higher regional courts have been published which also deserve some attention by assessing whether Covid-19 is a ‘cause’ of insured loss.

15

If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

As indicated in the response to Question 14, the decision of the Federal Court of Justice, as well as numerous high level court decisions have been released in the last two years. Most of these decisions deal with professional business interruption insurance policies.

The predominant opinion in court decisions is that Covid-19 does not constitute a ‘cause’ for losses in cases where the relevant insurance policy refers to the German Infection Protection Act in older versions in which Covid-19 has not yet been listed as a disease to be notified (please also refer to response to Question 13). However, in some cases, insurance policies include so-called dynamic references to the German Infection Protection Act. In such cases, the insured may claim for coverage.

16

If the answer to the above question is no, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lockdown or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

17

Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance.

No

Please refer to the responses to questions 7 and 13. The German (primary) insurance law system does not in general distinguish between the terms ‘cause’ and ‘originating cause’.

18

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss, have other courts in the country issued such opinions?

Yes

Please refer to the responses to questions 2 and 14. Before the ruling of the Federal Court of Justice, rulings of local and regional courts mostly stated that Covid-19 (at least under professional business interruption policies) does not constitute a ‘cause’. The predominant opinion here is that a cause is not given in case a business interruption policy makes static reference to the German Infection Protection Act (eg, to a version of the German Infection Protection Act where Covid-19 has not yet been listed as a disease to be notified, please also refer to the response to Question 13).

19

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a ‘cause’ of insured loss? Please give a short description of the conclusions in the judicial opinions or guidance.

No

The answer, if Covid-19 generally is an insured event causing losses, varies. The relevant reference point is always the wording of the insurance agreement. Points of conflict are:

  • Whether the reference to the German Infection Protection Act is dynamic or static and therefore incorporates Covid-19 (please also refer to the response to Question 13). Especially relevant is the question whether these clauses are valid under section 307 of the German Civil Code. This section states that provisions in standard business terms (eg, under standard insurance policy terms) are ineffective if, contrary to the requirement of good faith, they unreasonably disadvantage the other party to the contract with the user. An unreasonable disadvantage may also arise from the provision not being clear and comprehensible.
  • Whether the authority’s closure order must be lawful to effect eligibility to claim for benefits under the insurance contract. The courts tend to hold that this need not be the case.
  • Whether partial closures are also covered and at what point a business is deemed as ‘closed’.
  • On the amount of the claim and whether financial support, such as public benefits or claims for damages, will reduce the damage claims.
  • Whether repeated business closures are covered (such as a batch occurrence etc, please also refer to the response to Question 31).

20

If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

21

If the answer to the above question is no, do courts in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lockdown or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

22

Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Co-19 is an ‘originating cause’ of insured loss?

No

Please refer to the responses to questions 7 and 13. The German (primary) insurance law system does not in general distinguish the terms ‘cause’ and ‘originating cause’.

23

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss, have other courts in the country issued such opinions? If yes, please give a short description of the conclusions in such judicial opinions or guidance.

No

Please refer to the responses to questions 7 and 13. The German (primary) insurance law system does not in general distinguish between the terms ‘cause’ and ‘originating cause’.

24

Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’?

No

As indicated in the response to Question 7, German insurance law system focusses on the question of whether an event has caused a loss to be covered by an insurance policy. The terms ‘cause’ and ‘event’ are mostly not distinguishable in such a distinct a way as may be the case under common law. However, as indicated the response to Question 14, the German Federal Court of Justice has ruled that a static reference to the German Infection Protection Act is not a breach of section 307 German Civil Code (and therefore no ‘event’ has occurred).

25

Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in the judicial opinions or guidance.

No

Please refer to the response to Question 24.

26

If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

27

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’, have other courts in the country issued such opinions?

No

Please refer to the responses to questions 15 and 19. As Covid-19 is generally incorporated in the German Infection Protection Act, there is generally consent on the question that the Covid-19 pandemic is a covered event (and under certain circumstances causing a loss), if the contractual agreements provide for such events. The predominant question is whether the individual policy contracts incorporated the relevant paragraph of the German Infection Protection Act and therefore incorporates Covid-19 as an event or cause leading to covered losses.

28

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

29

If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 are covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

30

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of loss causation.

No

to our knowledge, no official authority has released particular contributions to the interpretation of Covid-19 in the context of loss causation.

Aggregation of claims

Yes/

No/ N/A

Additional comments, if any.

31

Does the country you are reporting on permit aggregation of claims arising out of a single originating cause? Please give a short description of the legal basis.

Yes

Many policies contain a series occurrence (Serienschadensklausel). This is a clause in insurance contracts according to which, in principle, several losses occurring at the same time or from the same cause are deemed to be one loss event. This clause can be seen as a subcategory of the aggregation of claims. For the existence of such a series occurrence required are legal or economic connections.

However, the aggregation of claims is mostly relevant in the context of reinsurance. The possibility of aggregation is based on the contractually agreed. If the reinsurance contract is based on a delimitable loss event (abgrenzbares Schadenereignis), aggregation is only permitted to the extent that the reinsurance contract specifically provides for it. If the reinsurance contract is based on a causal relationship (ursächlicher Zusammenhang) between the insured losses as a prerequisite for their aggregation into one reinsured loss, it is necessary to determine the causal relationship between these losses. This causal relationship can be determined through object connection, temporal connection, local connection or factual connection. These connections can stand alone or be used together.

32

Does the country you are reporting on permit aggregation of claims arising out of a single cause? Please give a short description of the legal basis.

Yes

Please refer to the response to Question 31.

33

Does the country you are reporting on permit aggregation of claims arising out of a single event? Please give a short description of the legal basis.

Yes

Please refer to the response to Question 31.

34

Does the country you are reporting on use an accepted test for determining whether claims can be aggregated? For example, does the country you are reporting on apply to four unities test to determine whether aggregation is appropriate? Please give a short description of the legal basis.

No

No, as indicated in the response to Question 31, claims aggregation is mostly applied under reinsurance contracts. Since German reinsurance law is highly influenced by arbitration clauses and choice-of-law clauses, there has not been a binding or broadly accepted test established for claims aggregation (at least for official courts). However, if a delimitable loss event is agreed, then a test comparable to the law of unities is applied between the parties pursuant to our experiences. If a causal relationship is agreed upon, then this relationship needs to be determined using one or several of the connections described in the response to Question 31.

35

Have courts in the country you are reporting on issued jurisprudence concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the legal basis.

No

In our experience, there has not been specific Covid-19 jurisprudence on this topic (regarding the case-law situation of aggregate claims under German law, please also refer to the response to Question 34). However, an indicator might be that the German Federal Court of Justice determined in the context of an architect liability insurance, that a series occurrence (Serienschadenklausel) is only permissible if it is limited in time. This might indicate that claims that lie at a more or less greater period in time (such as for official closure orders issued only in intervals of several months) cannot be aggregated.

36

Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

No

No, please refer to the response to Question 35.

37

If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

38

If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether insureds may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

As there has not been jurisprudence on this topic, the question of uniformity in jurisprudence is not an issue. Please also refer to the response to Question 35.

39

If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

Please also refer to the response to Question 35.

40

Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple properties or business locations arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

Please also refer to the response to Question 35.

41

Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple lockdown or stay-at-home orders arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

Please also refer to the response to Question 35.

42

Have courts in the country you are reporting on issued jurisprudence concerning whether cedents can aggregate claims arising out of Covid-19? Please give a short description of the legal basis.

N/A

Please refer to the responses to questions 31, 34 and 35.

43

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether cedents may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

44

If the answer to the above question is yes, do courts in the country you are reporting about permit cedents to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

45

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and aggregating claims.

No

To our knowledge, no official authority has released particular contributions to the interpretation of Covid-19 and aggregating claims.

Property damage

Yes/

No/

N/A

Additional comments, if any.

46

Have courts in the country you are reporting on issued jurisprudence concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the legal basis.

No

Business interruption insurances are commonly only affected if the property damage is caused by the insured peril (versicherte Gefahr). This property damage must cause the business interruption and the resulting loss of earnings as an intermediate cause. While in the case of all-risk cover the occurrence of disease or pathogens at an insured location can in principle also be an insured peril, property damage is lacking. Furthermore, in particular, the exposure or contamination of insured objects with viruses does not constitute property damage because there is no impairment of the substance of the object and no sufficient impairment of the usability of the affected object.

47

Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance.

No

48

If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

49

If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether losses arising from Covid-19 constitute property damage? Please give a short description of the conclusions in such judicial opinions or guidance.

Yes

Please refer to the response to Question 46.

50

If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

51

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and property damage.

No

To our knowledge, no official authority has released particular contributions to the interpretation of Covid-19 and property damage.

Exclusions

Yes/

No/

N/A

Additional comments, if any.

52

Has Covid-19 been deemed a ‘natural peril’ in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

No

The decision by the local court of Munich (AG München, Urt v 20.05.2021 – 275 C 23753/20) deals with the question whether the Covid-19 pandemic can be considered a natural peril under a trip cancellation insurance. However, the court ruled that the pandemic is not a typical natural peril due to the lack of immediate physical impact, localised occurrence, and temporal containment (please also refer to the response to Question 7).

53

Has Covid-19 been deemed force majeure in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

Yes

According to German case law, epidemics are generally recognised as events of force majeure. The spread of Covid-19 virus is classified by the federal government as an epidemic or pandemic.

Some regional courts have ruled that Covid-19 is considered force majeure. The regional court of Paderborn (LG Paderborn, 3 O 261/20) has ruled under assessment of service agreement that a right of withdrawal of the client can be evoked by Covid-19.

However, we are so far not aware of any insurance-related court rulings dealing with the question on whether Covid-19 is deemed force majeure.

54

Is Covid-19 acknowledged as a notifiable disease in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

Yes

Section 6 paragraph 1 (no 1 lit t) German Infection Protection Act lists Covid-19 as a notifiable disease.

55

Is it common for insurance policies issued in the country you are reporting on to include a pandemic or virus exclusion? Please give a short description of the legal basis and common insurance practice.

No

Most professional business interruption insurance based their terms and conditions on the model of the German Insurance Association (Gesamtverband der Versicherungswirtschaft, GDV), which did not contain any epidemic/pandemic exclusion. However, the new model terms and conditions include a general epidemic/pandemic exclusion. (See https://www.gdv.de/de/betriebsschliessungsversicherung-65006)

56

Have any courts in the country you are reporting on determined that a pandemic or virus exclusion is void as against public policy in the context of Covid-19? Please give a short description of the legal basis and relevant jurisprudence.

No

As most insurance policies did not contain such an exclusion, (please refer to the response to Question 55), we are not aware of such jurisprudence on this topic.

57

Have any courts in the country you are reporting on otherwise determined that a pandemic or virus exclusion is unenforceable in response to Covid-19? Please give a short description of the legal basis and relevant jurisprudence.

No

Please refer to the response to Question 56.

58

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of exclusions.

N/A

To our knowledge, no official authority has released particular contributions to the interpretation of Covid-19 in the context of exclusions.

Regulatory oversight

Yes/

No/

N/A

Additional comments, if any.

59

Have insurance regulators in the country you are reporting on issued directives concerning coverage for claims arising out of Covid-19? Please describe the regulations that have been implemented.

No

The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) provides all the information regarding Covid-19 on its website at https://www.bafin.de/EN/Aufsicht/CoronaVirus/CoronaVirus_node_en.html. However, such directives have not yet been published.

60

Are regulators requiring or encouraging insurers to provide grace periods to insureds to make payments on premiums? If yes, please give a short description of the legal basis and relevant guidance.

N/A

The German Federal Financial Supervisory Authority did not require particular grace periods from insurers. However, in our experience, many insurers granted grace periods for insurance premiums on an individual basis, without being legally or contractually obliged to do so (eg, for monthly premiums for private health insurance).

Government action

Yes/

No/

N/A

Additional comments, if any.

61

Has the government in the country you are reporting on implemented relief measures for losses sustained as a result of Covid-19?

Yes

Several relief measures have been established. To name a few, there was a temporary reduction of VAT, short-time working (Kurzarbeitergeld – a social insurance programme whereby employers reduce their employees’ working hours instead of laying them off and the government pay an income replacement for the hours not worked by the employee), bridging aid for small and medium sized enterprises, support of young people and families and an economic stabilisation fund released by the German Federal Government.

For further relief measures and more details, see: https://www.bundesfinanzministerium.de/Web/EN/Issues/Public-Finances/stimulus-package-for-everyone/stimulus-package-for-everyone.html

62

If the answer to the above question is yes, are the relief measures available to both individuals and businesses?

Yes

Please refer to the response to Question 61.

63

Briefly describe the types of relief measures available to individuals and businesses.

There was aid to businesses (Corona funds), especially aid for smaller businesses in affected industries such as restaurants, hotels, etc, but also to major German companies such as Lufthansa, which were structured loans. There were also other soft-aid, such as the suspension of the requirement to file for insolvency.

Article 240 EGBGB provides for a moratorium for Covid-19-related consumer loss.