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02 February 2021
In a recently published decision, the Federal Court of Justice ruled on the obligation of an assured to notify its insurer of a risk-relevant fact prior to the conclusion of the insurance contract.
In 2008 the assured had suffered a fracture, which had affected his fibula and outer ankle. He had spent some time in hospital and was unable to work for two months. However, the assured had been unaware that he had fractured his outer ankle. In 2009 he concluded a disability insurance policy. The application form for such insurance raised questions regarding accidents but qualified that bone fractures that had healed without complications and without joint involvement were irrelevant. The assured answered the questions in the negative.
The insurer learned about the 2008 fractured fibula in the course of the claims assessment due to another illness which the assured had suffered and had disability insurance cover for 2013 to 2015. In December 2014, due to the assured's alleged breach of the pre-contractual duty of disclosure, the insurer retroactively included in the insurance contract a clause which excluded all disability claims which had been caused by an accidental injury to the assured's outer ankle.
The assured requested that the clause be deleted. The action was successful in both the lower instances; however, it was appealed by the defendant insurer.
The Federal Court of Justice dismissed the appeal. The court held that the assured had not objectively violated his pre-contractual duty of disclosure and the insurer had therefore not had the right to adjust the contract pursuant to Section 19(4) of the Insurance Contract Act. The obligation to notify according to Section 19(1) of the Insurance Contract Act presupposes the assured's positive knowledge of a risk-related circumstance. This positive knowledge must be part of the objective facts of the obligation to notify, which the insurer must prove. An obligation to notify circumstances of which the assured lacks knowledge is meaningless. A person obliged to notify cannot violate such obligation because, according to its state of knowledge, there is nothing about which it could inform its insurer.
According to the findings of the lower courts based on the testimony of the assured and the assured's physician, the assured had been unaware of the risk-related joint involvement in his fibula fracture when he had submitted his application.
Even if the assured's lack of knowledge of the joint involvement had been due to negligence, there had been no objective breach of duty because such knowledge required positive knowledge of the declarable circumstance. Negligent unawareness on the part of the assured cannot replace the lack of knowledge of a declarable circumstance.
The decision once again clarifies the important distinction of cases in which there is an objective breach of duty and cases in which there is not. Negligence is relevant only where there is an objective breach. If there is no objective breach, as found in this case, fault is irrelevant.
For further information on this topic please contact Dieter Schwampe or Karen Lorenz at Arnecke Sibeth Dabelstein by telephone (+49 40 31 779 70) or email (email@example.com or firstname.lastname@example.org). The Arnecke Sibeth Dabelstein website can be accessed at www.asd-law.com.
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