Frankfurt Higher Regional Court: insurance brokers may be obliged to draw attention to exclusions of cover

An insurance broker may in exceptional cases be obliged to draw an insured party’s attention to certain exclusions of cover. This was confirmed by the Higher Regional Court [Oberlandesgericht - OLG] of Frankfurt (decision of 13 May 2022, 7 U 168/16).

The OLG Frankfurt am Main has ordered an insurance broker to pay damages due to inadequate clarification of coverage exclusions in an accident insurance policy. The broker had failed to point out to the subsequent policyholder during the consultation that the general accident conditions excluded insurance coverage for accidents at racing events.

The court found that insurance brokers are not generally obliged to provide clarification about coverage exclusions. Rather, it is the responsibility of the policyholder to obtain a copy of the terms and conditions of the contract and check them. Exclusions always have to be expected. However, an exception to this rule must be made if the insurance broker must reckon with the obvious possibility of a misunderstanding on the part of the insured person regarding the scope of the insurance.

This was the case here: the policyholder had informed the broker several times during the consultation that he regularly participated in motorcycle races. The OLG considered the lack of clarification to be a violation of the consulting and documentation obligations of Sec. 61 of the German Insurance Contract Act [Versicherungsvertragsgesetz, VVG]. The broker should have realised that the brokered insurance would not be able to cover the main accident risk.

Insurance brokers should always take the decision of the OLG Frankfurt am Main to heart when providing brokerage services. The wishes and special circumstances of the insured party should be carefully noted. Recognisable personal or situational circumstances of the policyholder may lead to a more extensive duty to advise, even in the case of less complex insurance products. Furthermore, comprehensive consulting documentation prevents liability traps.

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