1. Complaint options with the insurance company: Policyholders can typically start by filing a complaint directly with their insurance company. The company usually has a procedure for handling complaints and will attempt to resolve the dispute
2. Insurance Appeals Board: This is an independent body that handles disputes between policyholders and insurance companies. The Board can only handle disputes regarding personal insurance matters and only cases that are of such uncomplicated nature that the matter can be decided on a written basis.
3. Legal proceedings: If the dispute remains unresolved by the insurance company or the Insurance Appeals Board, policyholders may pursue traditional litigation to have their case resolved in civil court.

There are no specific requirements for procedural steps prior to initiating legal action for insurance cases as such. The policyholder must observe the steps outlined in the insurance policy before filing a lawsuit. Thus, correct notification must be submitted to the insurance company. Notification should be made as soon as possible to the insurance company. There is an overall limitation period of 3 years from the time of the damage. The burden of proof that a covered damage has occurred lies with the policyholder. Therefore, the policyholder is also obligated to submit all relevant information, documentation, etc., which may contribute to clarifying the matter at the insurance company’s requests in order to make a decision in the case. It is also the policyholder’s obligation to ensure damage limitation if necessary.

Similarly, insurance companies are subject to a range of legislation governing how insurance companies may and must handle insurance cases.

The Danish courts are home to a plethora of insurance disputes, that are filed every year. Due to this, the system is designed to ensure efficient processing of various types of disputes concerning insurance coverage. Both parties also have the choice to appeal a verdict to one of the high courts. Insurance cases can also, in certain cases, be tried at the Supreme Court. Lastly, a special appeal board for insurance disputes has been established that is also equipped to handle issues that can also be brought before Danish courts. Based on this, Denmark is very adept at handling complex insurance disputes. However, it is important to note that insurance cases in civil courts are not handled by judges specialized in insurance disputes. The Danish litigation system follows a general principle that judges are generalists, meaning they do not necessarily have specific expertise in insurance law. However, there are exceptions to this in other areas of law, where the judge will hold special expertise. This is not the case for insurance disputes.

Regarding all insurance disputes

For disputes regarding insurance, there are no mandatory alternative dispute resolutions that either the insurer or the policyholder has to choose before seeking out traditional adjudication. However, parties always have the option of alternative dispute resolution, by choosing to settle their disputes through negotiations, mediation, arbitration etc.

Regarding private consumers

As it pertains to insurance in particular, private consumers (as policyholders) have the option of filing a formal complaint to the special Insurance Appeals Board. The policyholder can to bring their case before this body, for any complaints they have regarding their own insurance-policy. However, this route is also not mandatory, meaning that either party may always bring their case before the court, as their first means of dispute resolution

The costs that arise from the settlements of insurance disputes, are regulated by the same rules that regulate other civil disputes. These rules entail that the, loosing party must compensate the winning party, for costs of the insurance dispute, unless the parties have agreed otherwise. Thus, successful policyholders are entitled to recover cost of insurance disputes from insurers. However, regardless of the above stated, the court can decide that losing party must not or only partially compensate the winning party for its expenses.

Court decisions

The appeal process for court decisions regarding insurance-disputes follows the same rules as other civil disputes in the Danish judicial system. Every party has a right to have their case tried before 2 court instances at the minimum.

The general rule dictates, that new cases are brought before the district court. However, any party to a dispute, the right to have their case tried two different courts. Firstly, by a district court – and upon appeal of said decision – to one of the high courts. Disputes may also be tried by a third court – the supreme court, upon a request and approval from the Appeals Permission Board.

Arbitral Awards

Arbitral Awards are binding for the parties of the insurance dispute. The instances where an arbitral award can be overturned or deemed void are quite limited with a very narrow access to traditional adjudication.

Policyholders are required to disclose any information that is deemed to be of importance upon entering an insurance-agreement with the insurer. The consequence of withholding information or concealing a circumstance that is assumed to be of importance or affects the risk assessment, can result in the agreement not being binding upon the parties.

The policyholder’s duty to disclose continues to remain during the entire period of the insurance coverage. If a risk circumstance specified in the policy is changed in such a way, that the company’s risk thereby increases beyond what can be assumed to have been taken into account upon entering the agreement, the policyholder is under obligation to disclose such a change. If the policyholder fails to do so, the company is free from liability, granted that it would not have provided the insurance, if they conditions brought about the change had existed when the agreement was entered.

There are relatively strict rules for what insurance companies are able to do, when they suspect that a policyholder is withholding information and thus, breaching the duty to disclose, especially in regards to private consumers. Insurance companies must deal in accordance with the rules on good practice. The companies may only use personal surveillance if the companies have a well-founded and documented suspicion of fraud. The company must be able to present concrete documentation for the basis of the suspicion. Companies should always choose the least intrusive investigation method and try less intrusive methods like electronic searches first if they want to investigate a policyholder.

However, companies as policyholders, do enjoy less protection under the current regulation. CEOs, business owners and etc. who have taken out insurance on behalf of the company, are not being considered injured parties within the meaning of the regulation, which is a requirement for being covered by the regulation’s rules on investigations conducted by insurance companies. In practice, this means that insurance companies have unrestricted access to conduct investigations against, business owners and etc. for insurance policies they have taken out on behalf of the company. However, insurance companies must still always comply with applicable Danish law and good practice when conducting such investigations

The policyholder’s state of mind

The policyholder is obliged to ensure that they provide correct information at the time of entering the agreement, but also at the time of reporting the loss or damage. The requirement to provide correct information is not dependent on the policyholder’s state of mind, other than the usual contract law and consumer protection rules which are generally applicable in Danish law.

Provisions that are deemed unusual compared to the terms that are common within the insurance industry, or the insurer interprets a standard insurance provision contrary to industry custom, the provision or the entire contract can be overridden, either in part or in whole, if it is obvious that the policyholder would otherwise be at a disadvantage compared to other policyholders in similar situation.

When entering an insurance agreement, the policyholder must answer questions in a loyal manner, but the policyholder cannot be required to provide information about matters that are not asked about and that they cannot know that the company deems important. There are no strict requirements for the policyholder’s proof of good faith.

Consumer insurance contracts does not operate with implied terms. Thus, in case of doubt, the interpretation that leads to the most unfavourable result for the party that has been responsible for drawing up the contract must be chosen. Due to the insurance company being the party that drew up the agreement, they bear that risk. Furthermore, any terms that the consumer have had no opportunity to influence the content of, in case of doubt of interpretation, must be interpreted in favour of the consumer.

Where the insurance policy is designed to respond to claims by third parties, there are often limitations on insurers’ right to rely on certain defences. In compulsory insurance, there may be limitations on the types of exclusions that insurers can impose. In some compulsory insurance policies, liability is imposed on the insured regardless of fault or without the need to establish fault (no-fault).

The most common ways, that coverage is triggered are:

1. When a loss occurs due to specific perils or events explicitly listed in the insurance policy. However, another way to trigger coverage.
2. When coverage is triggered for all perils except those specifically excluded in the policy. This provides broader coverage than named perils/insurance triggers, and the burden is on the insurer to prove that a particular peril is excluded.
3. Lastly, some policies cover losses resulting from accidental and unforeseen events, regardless of the specific cause, as long as it is not excluded.

Insurance does not cover intentional damage. Therefore, the policyholder is liable for any loss they intentionally caused. Some policies exclude coverage for consequential or indirect losses that result from a covered event. For example, a property insurance policy may cover fire damage but exclude operational losses or other financial losses, such as operational disruptions and/or reduction of output.

Yes. As shortly touched upon under question 11, in cases of ambiguity or doubt regarding the interpretation of the insurance policy, the interpretation that results in the most unfavorable outcome for the party responsible for drafting the contract must be chosen. Since insurance companies draft the agreements, they bear this risk.

A requirement for insurance coverage is that a causal connection can be determined between the actions or omissions of the party causing the damage and the actual damage which has occurred. In Danish law, the clear general rule in the context of compensation is whether the actual damage would have occurred if the negligent act or omission had not taken place. In cases of multiple damages, separate assessments must be made. In the case of multiple damages, the insurance company will examine each damage as an individual claim. The policyholder bears the burden of proof for causation, but depending on the circumstances and specific factors of the case, the burden of proof may shift.

The policy, may specify if a concurrent causation clause applies, which prescribes that if a loss is caused by multiple factors, and at least one of those factors is covered by the insurance policy, the insurer may be liable for the entire loss.

On the other hand, the policy may specify that an efficient proximate cause clause applies, whereafter the focus is on determining the dominant cause that set-in motion the chain of events leading to the loss. If the efficient proximate cause is a covered peril, the insurance policy may respond. However, if the primary cause is an excluded peril, the insurer may not be liable.

When there is a breach of policy conditions by the insured, insurers usually have several remedies available. The remedies are typically depending on the nature and severity of the breach, and can vary based on the terms outlined in the insurance policy and applicable laws. Common remedies include, options as, policy cancellation, denial of coverage or even legal action.

In general, insurance policies can be structured in different ways, and the language used in the policy will dictate how breaches affect coverage for other insured parties.

Even if insurers decline cover for claims, policyholders are generally still required to comply with the policy conditions, unless the policy itself is terminated or voided due to specific reasons outlined in the policy. This is due to the fact that insurance policies are contracts, and both the insurer and policyholder have obligations outlined in the terms and conditions of the policy.

Once entitlement to recover under an insurance policy is established, the process of assessing quantum can vary depending on the type of insurance policy, the nature of the loss, and the applicable laws. However, depending on the type of loss, there are some typical factors to be considered when assessing quantum, for example, the loss based on documentation, any insurance policy terms and limits for insurance coverage or the operation loss for businesses. In some cases, it may be necessary to seek expert opinions to assess the quantum of damages. For example, in cases involving specialized property or liability issues, experts in those fields may provide evaluations.

The relevance of pre-existing plans for a change of use to the calculation of recoverable loss in the context of a policy providing for reinstatement of damaged property depends on the specific terms and conditions outlined in the insurance policy. However, as in general it can be said that when a policy provides for the reinstatement of damaged property, the insurance coverage is typically intended to restore the property to its pre-loss condition. Thus, the focus is on repairing the property in a manner that is consistent with its original use and purpose at the time of the loss.

After paying claims to the policyholder, the insurer subrogates the policyholder’s claim against any third parties, if the third party is responsible for the loss. To the extent that the insurance company has compensated the policyholder, the responsible third party is liable against the insurance company. This means that the company’s claim is limited to the claim that the injured party themselves could have claimed against the responsible third party (or their insurance company).

Firstly, the policyholder always has a duty to mitigate their loss, meaning they must do everything within their power to ensure that the insurance company’s liability is minimized. This duty still applies if the insurer delays payment. The policyholder may have the right to claim additional damages, due to the insurers failure to make payment. However, this heavily depends on the insurance policy, since many policies already exclude coverage for operational losses or other financial losses, such as operational disruptions and/or reduction of output that subsequently emerges from the original damage, for which there is coverage.

What is most probable is that the policyholder will claim the interest that accrues on a claim during legal proceedings against the insurer. If the policyholder wins the case, the interest is typically awarded to compensate for the delay in payment, ensuring that the policyholder is compensated for the financial loss caused by the insurer’s failure to pay on time for, a claim there should have been coverage for. Furthermore, the insurance payment benefit can be claimed 14 days after the company has been able to obtain the necessary information to assess the insurance event and determine the amount of the insurance. If, before a final settlement can take place, it is determined that the company must pay a portion of the claimed amount, this portion can be requested for payment according to the provision in the previous sentence. Subsequently, Insurance companies are obligated to inform policyholders about the above stated.

The injured party also enters into the insured’s rights against the company if the injured party’s claim for compensation is covered by the insured’s bankruptcy, debt restructuring etc. To the extent that the injured party’s claim has not been covered, the full claim for compensation can be directed against the company. If the policyholder becomes bankrupt, this has no effect on the insurance agreement apart from what follows from the general rules of the law.

Class action or group litigation options are generally available in all civil cases, including insurance claims, as long as the cases meet the specific requirements for this form of litigation. This typically involves having a large group of individuals with common legal or factual issues, and the claims need to be sufficiently similar to justify collective action. While class action or group litigation can be an effective way to handle bulk insurance claims, it does require careful consideration of factors such as the number of claimants, the nature of the claims, and whether the group’s interests align sufficiently to proceed as a collective case.

Insurance companies will often employ delaying coverage assessments instead of denying claims outright, aiming to avoid the immediate costs and risks associated with litigation. By dragging out the decision-making process, insurers hope that policyholders may not take timely legal action. This tactic can lead to the expiration of the statute of limitations, preventing policyholders from pursuing their claims in court if they do not enforce the litigation process within the necessary time frame. This strategy not only adds pressure on policyholders but also exploits gaps in their knowledge regarding deadlines and their legal rights, potentially leaving them without a legal recourse. This tactic is increasingly seen in different types of insurance types, regarding construction, particularly in cases involving damage to buildings, where insurers delay coverage assessments by asserting that they cannot make a technical assessment based on the available information, insurers often claim they need to obtain separate expert evaluations, further delaying the decision-making process. This can push the policyholder closer to the expiration of the statute of limitations, potentially preventing them from pursuing legal action.

Artificial intelligence and software in general are (due to their prevalence) facing extensive regulation and thus now integrated into legislation and legal regulation, particularly within EU law, which brings about significant changes for both consumers, businesses and insurance companies. For example, the new Product Liability Directive extends the liability for defective products to include software, including artificial intelligence and digital services. This means that businesses will increasingly be encouraged to take out product liability insurance that covers damages caused by their defective software.

Insurance companies will now need to adapt their policies to cover the risks associated with defective software. The directive also alters the burden of proof in certain instances, which makes it easier for those harmed to pursue claims against the seller, but simultaneously complicate the assessment of defectiveness for the insurance companies of businesses selling software.

Businesses involved in software development can expect higher insurance premiums as a result of the new rules. Insurance companies will also require documentation for product safety and regular software updates to ensure it remains secure and functional. Overall, the new directive means that both businesses and insurers will face significant changes in managing product liability and insuring software.

High interest rates, the highest inflation an energy crisis, and particularly extreme weather conditions in Denmark have generally led to higher costs in the insurance industry regarding compensation pay-outs. Despite this, Danish insurance companies have, according to the Financial Supervisory Authority, maintained a combined ratio below 90% for several years, which, compared to foreign companies, is quite impressive. Regarding Construction All Risk, the defect exclusion clauses from London Engineering Group has been used in Danish insurance policies for several years, but it is only now that we are beginning to see the consequences as the first legal cases regarding this are pending. In 2023, we were the first to conduct the first legal case in Denmark regarding the interpretation of the LEG 3 clause. However, the District Court concluded that the concept of damage was not fulfilled, and therefore, an assessment of coverage under the clause was not made, leading to an appeal to the High Court. There are other judgements regarding the interpretation and scope of the clause still pending, and we await the results to better understand the application of the clause in Danish law.

Due to the challenges insurance companies have faced in recent years with numerous weather-related damages most insurance companies have been and continue to be under pressure. As a result of this pressure, there has also been an increase in complaints filed with the Insurance Complaints Board due to rejections from insurance companies. The options for having the case reviewed by a board – or through mediation, as offered by the court in the course of a civil lawsuit – mean that some insurance cases can be resolved more quickly, which we believe we will see more of. But for larger claims the dispute for the most part result in court cases as such claims often are rejected by the insurance companies. This is a new development, as we previously saw these types of claims settled out of court but rather just by dialog between the parties.