JUVE Law Firm of the year

Insurance Contracts: Litigation and Product Advice

Risk as a business model

Germany is currently considered to be a very lucrative insurance market. “Abroad, the interpretation is that the good economic situation in Germany means there is also a lot to insure,” a specialist in the branch asserted. One product that has recently experienced strong growth is warranty and indemnity insurance (W&I), which mitigates risks connected with transactions. A blueprint for this would be the face-off between the Japanese buyer of the fittings manufacturer Grohe and its W&I insurer. In numerous cases, the widespread D&O policies come into play for coverage issues during clarification of managerial responsibility in cases of antitrust violations, corruption or compliance issues, once liability has been established.

At the beginning of 2016, the Federal Court of Justice (Bundesgerichtshof) delivered a judgment in this regard that is preoccupying the branch: Following an assignment of the claim, injured companies are permitted to pursue claims arising from a manager’s D&O insurance policy and proceed against the insurer directly. Aside from the questions about current products, insurers are continuing to fine-tune the costs for handling damages claims, precisely for mass products. Here, just as in insurance sales, IT and online issues continue to be a challenge for many.

Clyde, Ince and Fiedler – new players enter the market

No less than two international specialist firms entered the German insurance market in the fall of 2016: Clyde & Co and Ince & Co. The latter made its foray into the insurance segment via Cologne as an addition to its Hamburg office for maritime law. Both began with teams from respected competitors such as Noerr, BLD Bach Langheid Dallmayr and CMS Hasche Sigle. This further fueled the current debate in the D&O segment as to the extent to which the representation of insurers is compatible with advice to companies.

The question is whether the insurance teams in full-service firms are coming under noticeable pressure, specifically when, in such a litigious environment, the different positions of the various players – directors, companies and even the insurers – intensify possible conflicts of interest. In the corporate market, this means smaller firms are relied on to an increasing extent. Both the new international firms, as well as the new team that has split off from Friedrich Graf von Westphalen & Partner as Fiedler Cryns-Moll Jüngel, were likewise indicative of this.

Fierce competition in lucrative proceedings

The arrival of the new players has been viewed with distrust by several established insurance practices from another perspective: the business model of some firms is based on the right mix of regional or branch-specific litigation on the one hand and on more complex and higher-priced litigation on the other. There is concern that, with the arrival of the new outfits, the competition will be even fiercer for the latter.

 


 

Firms in this subchapter all have expertise in insurance contracts. A number of large law firms have also set up their own litigation practices, which act for insurers in liability and recourse cases, as well as arbitration proceedings. Such firms can be found in the ?commercial litigation and liability chapter.


PfeilJUVE Law Firm of the year