Duties of the Policyholder (Obligations)

For every insurance contract there are certain “rules of conduct” (also called obligations) that impose certain duties on the policyholder (e.g. in the event of a damage event). You must take these obligations very seriously, as a breach of these obligations can, in extreme cases, result in the loss of insurance coverage.

There are both legal obligations, which are regulated in the Insurance Contract Act (Versicherungsvertragsgesetz), as well as obligations that result from the agreed insurance conditions of your contract. We have summarised the most important obligations for you below.

1.1 Obligations upon Conclusion of the Contract

For an appropriate risk assessment, the insurer relies on your information before the contract is concluded. The Insurance Contract Act and the professional indemnity insurance conditions therefore stipulate that you answer the questions asked in the online application correctly and completely.

1.2 Consequences of Non-compliance with the Obligations when Concluding the Contract

If the obligation to report circumstances relevant to the risk is violated (at exali.com: incorrect or incomplete answers in the online application), the insurer can withdraw from the contract and, in the event of a claim, be wholly or partially exempt from payment. For co-insured parties, the policyholder’s reporting obligations and the legal consequences of their violation apply accordingly.

2.1 Obligations to be Observed during the Term of the Contract

If the obligation to report circumstances relevant to the risk is violated (at exali.com: incorrect or incomplete answers in the online application), the insurer can withdraw from the contract within three months from the day it became aware of the misrepresentation. If the insured event occurs before the insurer has knowledge of the misrepresentation or before the insurer has notified the insured of the intention to withdraw from the contract, indemnity is reduced in proportion to the difference between the premium agreed upon and the premium which would have been charged if the circustance was known. For co-insured parties, the policyholder’s reporting obligations and the legal consequences of their violation apply accordingly.

2.2 Consequences of Non-compliance with the Obligations During the Term of the Contract

Here, too, a grossly culpable breach can entitle the insurer to terminate the contract and can lead to complete or partial exemption from performance.

3.1 Obligations when Reporting a Damage Event

exali.com is also dependent on your cooperation when an insured event occurs. According to the Insurance Contract Act (in connection with the professional indemnity insurance conditions), you must therefore report the occurrence of the insured event to the insurer or exali.com in writing (also by email) within 3 days of becoming aware of it.

According to the Insurance Contract Act (in connection with the professional indemnity insurance conditions), the following notification and cooperation obligations must be observed after the occurrence of the insured event:

The policyholder must immediately report the following after becoming aware:

• judicial or investigative proceedings directed against the policyholder
• a payment order, arrest or penalty order
• a court notice, injunction or application for legal aid by the claimant
• an independent evidence procedure

Following the insurer’s instructions

The policyholder is obliged, following the instructions of the insurer, to prevent and mitigate the damage as far as possible and to do everything that serves to clarify the insured event, provided that the policyholder not expected to do anything unreasonable.

The policyholder must support the insurer in the defence against the damage as well as in the damage investigation and settlement, report in detail and truthfully, communicate all facts concerning the insured event and the consequences of the loss and send all documents which, in the insurer’s opinion, are relevant for the assessment of the insured event.

3.2 Consequences of Non-observance of the Obligations in the Event of Damage

If any of the obligations is violated, the insurer can be released from the obligation to perform provided the legal requirements are met, unless the violation is based neither on malice aforethought nor gross negligence.