Under what circumstances is a VSH insurer obliged to pay?

From the series of newsletters of the DHBW (Baden-Wuerttemberg Cooperative State University) Heidenheim on the topic “Mediation Law in Practice”:

At this point, lawyer Dr. Johannes Fiala, https://www.fiala.de, lecturer for insurance law at the DHBW Heidenheim, will answer your questions,

Your questions. Questions can be asked by emailing ott@dhbw-heidenheim.de.


In the case of pecuniary loss liability (VSH), a policyholder (VN) is obliged to report an impending loss already.

The insurer (VR) must then take action and examine the case. Within a few weeks (acceleration requirement), the BoD shall, after

to decide, at its own discretion, whether to reject unfounded claims or to provide compensation for justified claims.

Ultimately, the VR is obliged to indemnify the policyholder from claims in one way or another.

For a claim to be made, it is sufficient that the injured party believes that he has claims which he is pursuing or will pursue.

Sufficient is, for example, the extrajudicial demand for payment, the demand for acknowledgement, or a notice of dispute.

Any claim ground within the scope of protection of the VSH is sufficient. The BoD then examines in particular whether and in what form

its cover is given in terms of time and place, or the cover is excluded, for example, due to intent on the part of the policyholder.

For this purpose, the policyholder is first of all obliged to provide him with all necessary information on the facts of the case.

truthfully, if he does not want to jeopardise his insurance cover for this reason alone.

The obligation to provide legal protection (defence cover) or the alternative principal obligation to indemnify the insured against liability claims

(regulatory cover) are primary obligations of equal rank for the VR. Whether the injured party’s claim had merit,

is irrelevant to the fact that one of these coverages is owed. The BoD may, even if it considers the liability claim to be well founded

holds, opt for defensive coverage tactically first instead of regulation. There are also the cases of defensive coverage,

where liability is beyond question, but the amount of damages is wholly or partly in issue.

If the VR does not react, or does not react dutifully, the policyholder will have to call in a lawyer himself.

On the one hand, this is a matter of defending against liability, but it is also a matter of providing one’s own VSH insurer with an

declaratory action before the claims of the policyholder against the VR become time-barred after up to more than three years.

It has already happened that the BoD did not react at all to a notification of damage and the initial complaints.

Some financial services providers had insured loan brokerage and life insurance brokerage under the VSH conditions

– nevertheless, the VSH has refused to provide cover for credit-financed immediate annuity schemes. In many cases, this threatens the insolvency of the insured party.

Problematic are either non-existent or incomplete VSH covers, in areas without statutory VSH compulsory cover.

This applies, for example, to so-called liability umbrellas, pools, supplementary cover via framework agreements and agents.

In particular, those affected later discover that there was no VSH cover at all, or that this did not match the activity or the

products was suitably designed. Checking this off in good times would have been safer then.

by Dr. Johannes Fiala

by courtesy of


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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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