Commercial law insurance

Commercial law insurance

In international trade, insurance plays an important role in mitigating risks. In many areas, transport is standardized with standard contracts, insurance, intermediaries (freight forwarders, commercial agents, etc.), certifications, trade papers, and exchange prices. We assist organizations with negotiations and the conclusion of insurance agreements in the context of (inter)national trade.

Moreover, we assist organizations with various disputes, such as:

• Liability
• International trade dispute settlement (including arbitration)
• Collision

We have the knowledge and expertise to assume diverse roles: from advice to dispute resolution. We have an experienced team of lawyers and legal experts in the field of insurance. Contact us to discuss the possibilities.

Insurance within commercial law

Within commercial law, you encounter various forms of insurance, each with its own policy conditions, coverage, and legal complexities. Anyone who buys, transports, stores, or trades goods would be wise to tailor the appropriate coverage to the actual risks. The most important insurances we encounter in commercial practice are:

• Cargo transport insurance – covers damage to or loss of the cargo during transport and storage, regardless of who is liable.
• Hull insurance – covers damage to the means of transport itself, such as an inland waterway vessel, seagoing vessel, or trailer.
• Carrier's liability insurance – covers the carrier's liability for damage to or loss of goods entrusted to him.
• Business and professional liability insurance – covers damage caused by your company to third parties in the course of its business.
• Credit insurance – covers the risk that a trade debtor defaults on payment, an important instrument in (international) trade.

Whether it concerns an international group insuring a global transport portfolio or the baker on the corner wanting to cover his inventory and liability: we assess which coverage is appropriate and where the policy falls short.

The duty to disclose and concealment

A frequently underestimated risk is the pre-contractual duty of disclosure. Pursuant to Article 7:928 of the Dutch Civil Code , the policyholder must, before concluding the insurance, disclose all facts that he knows or ought to know and of which he knows or ought to understand that they are of importance to the insurer. If this duty of disclosure is breached – the so-called concealment – ​​the insurer may invoke far-reaching consequences.

The consequences of a breach are regulated in Article 7:930 of the Dutch Civil Code: the insurer may reduce the payout or even refuse it entirely if, had it been aware of the true state of affairs, it would not have concluded the insurance or would have done so under different conditions. Opposite these sanctions stands an important safeguard for the insured. Pursuant to Article 7:929 of the Dutch Civil Code, the insurer must notify the policyholder of the non-performance within two months of discovering it and indicate the possible consequences. These two months constitute a forfeiture period: if the insurer allows this to expire, it can no longer invoke concealment. We assess on both sides of the dispute whether a claim of concealment holds up.

Carrier liability and the connection with commercial contracts

When insuring transport, the interplay between the liability regime and the policy is crucial. In international transport, the liability of the road carrier is governed by the CMR Convention (Convention on the Contract for the International Carriage of Goods by Road), and in national transport, generally by the General Conditions of Carriage (AVC). These regimes include liability limits, which in principle also limit the amount of an insured claim.

In practice, carrier liability insurance comes in three forms – the exchange policy, the broker policy, and the company policy – ​​each with its own terms and conditions. Standard policies often cover only up to the statutory or treaty limit, unless additional coverage has been agreed upon. We assess whether your transport and storage contracts align seamlessly with the policy taken out, ensuring you do not fall between the cracks. This subject relates directly to our expertise in Transport and Logistics.

Coverage disputes: when does the insurer not pay out?

Most insurance disputes arise the moment things go wrong: damage occurs, a claim is filed, and the insurer rejects the payout in whole or in part. A coverage dispute can have numerous causes:

• a claim by the insurer based on concealment or a false statement;
• discussion regarding whether the damage falls under a coverage exclusion or policy clause;
• the absence of a causal link between the covered event and the damage;
• failure to comply with guarantees or security requirements in the policy;
• Concurrence of multiple insurance policies that appear to cover the same damage.

We analyze the policy conditions, the circumstances of the claim, and the correspondence, and determine whether the rejection is legally defensible. Where necessary, we litigate or seek a settlement, with a keen eye for the evidentiary position of both parties.

Recourse and subrogation

Once an insurer has compensated its insured for the damage, it may seek recourse against the party liable for that damage. Pursuant to Article 7:962 of the Dutch Civil Code, the insured's claims against the liable third party are transferred to the insurer by way of subrogation, to the extent that the insurer has compensated the damage. In commercial practice, this regularly leads to recourse issues between shippers, carriers, freight forwarders, and their insurers. Paragraph 3 of Article 7:962 of the Dutch Civil Code contains an important prohibition on subrogation with regard to certain closely related persons, such as employees and family members. We represent the interests of both insurers seeking recourse and entrepreneurs facing a recourse claim.

Frequently asked questions about commercial law and insurance

What is the difference between cargo transport insurance and carrier's liability insurance?
Cargo transport insurance covers damage to or loss of the cargo itself, regardless of who is liable. Carrier's liability insurance covers exclusively the liability of the carrier for goods entrusted to him. Both can complement each other, but they do not cover the same risk.

May an insurer simply refuse to pay out?
No. An insurer may only refuse or reduce payment on the basis of the policy conditions or the law, for example in the event of concealment (Article 7:930 of the Dutch Civil Code). Moreover, the insurer must invoke concealment within the time limit of Article 7:929 of the Dutch Civil Code. Whether a refusal is justified always requires a legal review.

What must I disclose when taking out insurance?
Pursuant to Article 7:928 of the Dutch Civil Code, you must disclose all facts which you know or ought to understand to be relevant to the insurer for assessing the risk. If you are in doubt as to whether something is relevant, disclose it; this will prevent later disputes regarding concealment.

Do you also help small business owners?
Yes. Our mixed teams of lawyers and in-house counsel assist both international corporations and small business owners – from a substantial transport portfolio to the baker on the corner who has a coverage dispute with his insurer.

Part of our expertise in Commercial Law

Insurance issues rarely stand alone. They are linked to your transport, purchase, and distribution contracts, as well as your broader risk management. This page is part of our broader expertise in Commercial Law. Within that area of ​​law, we also advise on commodity trading, agency , and distribution. Our mixed teams of lawyers and (in-house) legal counsel serve both international corporations and the baker around the corner. Please feel free to contact us to discuss your insurance needs.