by Johannes Fiala, lawyer (Munich), M.B.A. (Univ.Wales),
M.M. (Univ.), Certified Financial and Investment Advisor (A.F.A.), EC Expert
(C.I.F.E.), banker (www.fiala.de )
The experienced insurance broker will point out two common gaps in the VSH conditions to his VSH client: On the one hand, the lack of cover if the insured person in particular “knowingly violates an order, instruction, decision, power of attorney or in any other way”.
This can be mitigated by individual agreements or special cover concepts for the policyholder. Occasionally, the insurer denies coverage by relying on the claimant’s arguments ? not always with success. On the other hand, the insurer may invoke the dangerous serial loss clause.
Broker liability under the serial damage clause
A serial damage arises if the damage occurs ?on the same or a similar
source of error, by act or omission?. Then it is
only one case of damage, so that the sum insured is only available once for all damages. Some insurance broker ?sells? this to his customer wrongly
with the words “if you, as a tax consultant, incorrectly balance the occupational pension scheme in the annual accounts of various clients, then this is regarded as a claim ? so we take out a higher sum insured right away”.
The insurance premium is then unnecessarily high ? a classic error of advice on the part of the insurance broker.
The pitfall of the serial damage clause
The claims departments of VSH insurers also like to invoke the serial loss clause. One case involved the brokerage of real estate funds.
The intermediary had not sufficiently tested the concept ? numerous investors later demanded compensation for damages. The intermediary was
Cover granted to the extent of the sum insured once ? den
remaining damage was to be borne by the intermediary himself, and would thus have been overindebted. Therefore, the agent sued his VSH insurer and won before the BGH (judgement, file number IV ZR 19/03 as well as VersR 1991, 873).
Arguments of the BGH
The intermediary owes each prospective investor personalised advice. Even if this had affected the same investment object (real estate fund) again and again, in the opinion of the BGH each wrong consultation justifies an own offence, and just no serial damage.
The BGH narrows down the concept of serial damage, and requires a narrow
legal and economic context. Specifically, it can lead to
serial damage afterwards only come, if the always same or similar
breach of duty has occurred with the same customer! If mandates are handled independently of each other, a serial loss is therefore ruled out; such mandates do not form a community of fate within the meaning of the serial loss clause.
However, in addition to the principle that risk limitation clauses in the
Insurance law in general to be interpreted very narrowly are further arguments.
If there are gaps in the insurance cover, the insured person must be aware of these.
be strongly clarified ? otherwise, such clauses should only be considered from the perspective of
of a policyholder who does not have specialist knowledge of insurance law
interpreted (BGH, IV ZR 318/02).
Further ? and there is only one dissertation on insurance law ? the serial damage clause is likely to violate the principle of transparency (§ 307 BGB or § 9 AGBG), because the legal and economic effect of the clause is not clear to the average consumer.
VN hardly possible to keep track of.
Your insurance broker must carefully check overinsurance and underinsurance.
expert report � 03/2005
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About the author
PhD, MBA, MM
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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