Aggravation of Risk and Precautionary Measures in Non-Life Insurance: A Tricky Scope for the Insurer?

Open access


Aggravation of risk and failure to take precautionary measures are focal issues in non-life insurance in terms of potential partial or full release of the insurer from the duty to perform. Not infrequently, it is difficult to draw a line between the aggravation of risk on the one hand, and non-compliance with precautionary measures on the other, since a particular action by a policyholder may present both situations. At the same time, the legal remedies available to the insurer regarding these two situations are different in scope. The aggravation of risk and non-compliance with precautionary measures are precisely the bases on which insurers actually reduce indemnity or refuse to compensate for damages. This article explores the differences between insurance laws in the Baltic states—specifically, the Estonian Law of Obligations Act, the Latvian Insurance Contract Law and Lithuanian rules contained in the Civil Code and Insurance Law. The article explores the differences between the Baltic states’ insurance laws and the Principles of European Insurance Contract Law (PEICL) with regard to a policyholder’s duty in relation to aggravation of risk and precautionary measures, as the rights and obligations of policyholders do change where the optional instrument is applied. The article also includes comparisons to German, Finnish and Russian insurance law.

1. Aavik, Kadi. Kindlustusandja täitmiskohustuse piirangud vabatahtlikus kahjukindlustuses. Tartu: University of Tartu, 2009 // [in Estonian].

2. Abramov, V. Iu., and S. V. Dedikov. Sudebno-prakticheskii kommentarii k strakhovomu zakonodatel’stvu. Moskva: Wolters Kluwer, 2004 [in Russian].

3. Akhinian, V. M. “Novyi vzgliad na dogovornye iskliucheniia v strakhovom prave.” Pravovedenie 2(5) (2009): 7–11 [in Russian].

4. Basedow, Jürgen, et al. Principles of European Insurance Contract Law (PEICL). Munich: Sellier European Law Publishers, 2009.

5. Basedow, Jürgen. “Transjurisdictional Codification.” Tulane Law Review 83(4) (2009): 973–998.

6. Baumann, Horst, et al., eds. VVG Großkommentar zum Versicherungsvertragsgesetz, Band 1, Einführung, Article1-32 VVG. Berlin, Boston: De Gruyter, 2012 // [in German].

7. Belykh, V.S. Strakhovoe pravo Rossii. Moskva: Norma, 2009 [in Russian].

8. Brand, Oliver. “Contract Terms: Judicial Approaches to the Interpretation of Insurance Contracts”: 93–119. In: Julian Burling and Kevin Lazarus, eds. Research Handbook on International Insurance Law and Regulation. Edward Elgar Publishing Ltd., 2011.

9. Chirico, Filomena, and Pierre Larouche, eds. Economic Analysis of the DCFR: The Work of the Economic Impact Group Within CoPECL. Berlin, New York: Sellier, De Gruyter, 2010.

10. Chirico, Filomena, Eric Van Damme, and Pierre Larouche. “A Giant with Feet of Clay: A First Law and Economics Analysis of the Draft Common Frame of Reference (DCFR).” TILEC Discussion Paper No. 2010-025 (June 22, 2010): 1–17 //

11. Clarke, Malcolm. “Aggravation of Risk During the Insurance Period.” Lloyds Maritime and Commercial Law Quarterly 1 (2003): 109–124.

12. Clarke, Malcolm. “Late Payment of Insurance Money.” Erasmus Law Review 5 (2) (2012): 115–121.

13. Cousy, Herman. “About Sanctions and the Hybrid Nature of Modern Insurance Contract Law.” Erasmus Law Review 5 (2) (2012): 123–131.

14. Cousy, Herman. “The Principles of European Insurance Contract Law: Duty of Disclosure and the Aggravation of Risk.” ERA Forum 9 (2008): 119–132.

15. Delfos-Roy, Yvonne. “The PEICL and the Duty of Disclosure.” European Review of Private Law 1 (2011): 71–86.

16. Deutsch, Erwin. Versicherungsvertragsrecht. Karlsruhe: Verlag Versicherungswirtschaft GmbH, 2005 [in German].

17. Fogel’son, Iurii. “Kommentarii k stat’iam glavy 48 Grazhdanskogo kodeksa RF ‘Strakhovanie’.” Fond Zashchity prav strakhovatelei // [in Russian].

18. Fontaine, Marcel. “An Academic View”: 29–44. In: Helmut Heiss and Mandeep Lakhan, eds. Principles of European Insurance Contract Law: A Model Optional Instrument. Munich: Sellier European Law Publishers GmbH, 2011.

19. Gavrilova, V. E. Strakhovanie. Moskva: Izdatelstvo Moskovskogo Universiteta, 2012 [in Russian].

20. Heiss, Helmut, Malcolm Clarke, and Mandeep Lakhnan. “Europe: Toward a Harmonised European Insurance Contract Law—The PEICL”: 603–621. In: Julian Burling and Kevin Lazarus, eds. Research Handbook on International Insurance Law and Regulation. Edward Elgar Publishing Ltd., 2011.

21. Heiss, Helmut. “Insurance Contract Law Between Business Law and Consumer Protection”: 335–353. In: Karen B. Brown and David V. Snyder, eds. General Reports of the XVIIIth Congress of the International Academy of Comparative Law/Rapports Généraux du XVIIIème Congrès de l’Académie Internationale de Droit Comparé. Dordrecht, Heidelberg, London, New York: Springer, 2012.

22. Heiss, Helmut. “Proportionality in the New German Insurance Contract Act.” Erasmus Law Review 5 (2) (2012): 105–114.

23. Heiss, Helmut. “The Common Frame of Reference (CFR) of European Insurance Contract Law.” ERA Forum 9 (2008): 95–109.

24. Hinchliffe, Peter. “Review of Principles of European Insurance Law.” ERA Forum 9 (2008): 167–175.

25. Hoppu, Esko, and Mika Hemmo. Vakuutusoikeus. Helsinki: WSOYpro, 2006 [in Finnish].

26. Karapetov, A. “Pravo na otkaz ot vyplaty strakhovogo vozmeshcheniia s tochki zreniia printsipa svobody dogovora.” Zakon 1 (2010): 118–125 [in Russian].

27. Khudiakov, A. I. Teoriia strakhovaniia. Moscow: Statut, 2010 [in Russian].

28. Koch, Robert. “German Reform of Insurance Contract Law.” European Journal of Commercial Contract Law 2 (3) (2010): 163–171.

29. Kramer, Xandra. “The New European Conflict of Law Rules on Insurance Contracts in Rome I: A Complex Compromise.” The Icfai University Journal of Insurance Law VI (4) (2008): 23–42.

30. Lakhan, Mandeep, and Helmut Heiss. “An Optional Instrument for European Insurance Contract Law.” Utrecht Journal of International and European Law 27/71 (2010): 1–11.

31. Lehtipuro, Katriina, et al. Vakuutuslainsäädänto. Sastamala: Finanssi-ja Vakuutuskustannus OY, 2010 [in Finnish].

32. Mantrovs, Vadims. “Problem Questions of Insurance Contract Regulation in Latvia”: 562–574. In: The Quality of Legal Acts and its Importance in Contemporary Legal Space. Riga: University of Latvia, 2012 //

33. Neuhaus, Kai-Jochen, and Andreas Kloth. Praxis des neuen VVG - Arbeitsbuch für Versicherer und Vermittler. Münster: ZAP Verlag, 2008 [in German].

34. Neuhaus, Kai-Jochen, et al. Praxiskommentar zum Versicherungsvertragsrecht. Münster: LexisNexis Deutschland GmbH, 2011 [in German].

35. Norio-Timonen, Jaana. Vakuutussopimuslain pääkohdat. Helsinki: Talentum, 2010 [in Finnish].

36. Pynt, Greg, and Kyriaki Noussia. “Report on, and Minutes of, the Consumer Protection and Dispute Resolution Working Party Session on Precautionary Measures.” Consumer Working Party Session, IV AIDA Europe Conference. London (September 13-14, 2012) //

37. Rantala, Jukka, and Teivo Pentikäinen. Vakuutusoppi. Sastamala: Finanssi-ja Vakuutuskustannus OY, 2009 [in Finnish].

38. Rühl, Giesela. “Common Law, Civil Law, and the Single European Market for Insurance.” International and Comparative Law Quarterly 55 (2006): 883–884.

39. Rühl, Giesela. “Precautionary Obligations (Insurance Contracts)”: 1–7. In: Jürgen Basedow, Klaus Hopt, and Reinhard Zimmermann, eds. Encyclopaedia of European Private Law. Oxford University Press, 2012 //

40. Sakellaridou, Stella, and Kyriaki Noussia. “Precautionary Measures Under P.E.I.C.L.—Art. 4:101 & The Position Under Greek Law.” Consumer Working Party Session, IV AIDA Europe Conference. London (September 13-14, 2012) //

41. Schauer, Martin. “Comments on Duration of Contract and Precautionary Measures.” ERA Forum 9 (2008): 157–165.

42. Schwintowski, Hans-Peter, Christoph Brömmelmeyer, et al. Praxiskommentar zum Versicherungsvertragsrecht. Münster: LexisNexis Deutschland GmbH, 2011 [in German].

43. Schwintowski, Hans-Peter. Neuerungen im Versicherungsvertragsrecht. Berlin: Zeitschrift für Rechtspolitik, 2006 [in German].

44. Shakhov, V. V., V. N. Grigor’ev, and A. N. Kuzbagarov. Strakhovoe pravo. Moskva: Zakon i pravo, 2012 [in Russian].

45. Sukhorukova, S. A. Strakhovye spory: sbornik sudebnoi praktiki. Moskva: Wolters Kluwer, 2006 [in Russian].

46. Tanaga, Andrei. “O vliianii viny sub”ektov strakhovogo obiazatel’stva na obiazannost’ strakhovshchika proizvesti strakhovuiu vyplatu.” (July 23, 2013) // [in Russian].

47. Taradonov, S.V. Strakhovoe pravo. Moskva: Iurist, 2008 [in Russian].

48. Van Tiggele – Van der Velde, Mop. “About a New Balance in the Mutual Obligations of Both Parties to a Contract of Insurance and a New System of Sanctions.” Erasmus Law Review 5 (2) (2012): 93–95.

49. Varul, Paul, et al. Võlaõigusseadus II. Kommenteeritud väljaanne. Tallinn: Juura, 2007 [in Estonian].

50. Wandt, Manfred. “1. Kapitel Allgemeines Versicherungsvertragsrecht”: 3–121. In: Andres Engelbrecht, Wolgang Halm, and Frank Krahe, eds. Handbuch des Fachanwalts: Versicherungsrecht. München: Luchterhand, 2004 [in German].

51. Wansink, J. Han. “Precautionary Measures: A Friendly or Hostile Tool of Limiting Insurance Coverage?” ERA Forum 9 (2008): 151–155.

52. Weyers, Hans-Leo, and Manfred Wandt. Versicherungsvertragsrecht. Idstein, Hessen: Luchterhand Verlag GmbH, 2003 [in German].

53. Zaveckas, Kazimieras. Pareigos atskleisti informaciją draudimo santykiuose turinys: teoriniai ir praktiniai aspektai. Summary of a doctoral dissertation. Vilnius: Mykolas Romeris University, 2008 // [in Lithuanian].

1. AB Lietuvos draudimas vs. UAB Hanza Lizingas. Supreme Court of Lithuania, Case No. 3K–3–354/2004 // [in Lithuanian].

2. AS Hansa Liising Eesti vs. Salva Kindlustuse AS. Supreme Court of Estonia, Case No. 3-2-1-17-08, 2008 // [in Estonian].

3. BTA “Commercial Property Insurance: Terms and Conditions No. 4A” //

4. Citygraaf OÜ vs. Salva Kindlustuse AS. Supreme Court of Estonia, Case No. 3-2-1-76-07, 2007 //

5. Commission Decision of 17 January 2013 on Setting up the Commission Expert Group on a European Insurance Contract Law. Official Journal of the European Union, C 16/6 (January 19, 2013).

6. Commission Proposal for a Council Directive on the Coordination of Laws, Regulations and Administrative Provisions Relating to Insurance Contracts. Official Journal of the European Union, C 190/2 (July 6, 1979).

7. Council Directive 93/13/EEC of 5 April 1993 on Unfair Terms in Consumer Contracts. EU Official Journal, L 095 (April 21, 1993): 0029−0034.

8. Estonian ERGO Insurance SE’s Terms and Conditions for Vehicle Insurance //

9. European Commission Green Paper from the Commission on Policy Options for Progress Towards a European Contract Law for Consumers and Businesses. COM(2010)348 final (July 1, 2010) //

10. European Court of Justice Judgment in Case No. C-484/08, 2010. Official Journal of the European Union, C 209/6, 6 (July 31, 2010).

11. European Parliament Resolution of 8 June 2011 on Policy Options for Progress Towards a European Contract Law for Consumers and Businesses //

12. Federal’nyi Zakon RF “Ob obespechenii dostupa k informatsii o deiatel’nosti sudov v Rossiiskoi Federatisii. No. 262-FZ (December 22, 2008). Rossiiskaia gazeta (December 26, 2008) // [in Russian].

13. Finnish Insurance Contract Act (Vakuutussopimuslaki). No. 28.6.1994/543 // [in Finnish].

14. Fond Zashchity prav strakhovatelei // [in Russian].

16. German Insurance Contract Act (Versicherungsvertragsgesetz). Bundesgesetzblatt, I page 2631, 23/11/2007 [in German].

18. Insurance Contract Law: The Business Insured’s Duty of Disclosure and the Law of Warranties. The Law Commission Consultation Paper No. 204 and The Scottish Law Commission Discussion Paper No. 155 //

19. IS vs. SAS. Estonian Harju County Court, Case No. 2-07-10217, 2007 // [in Estonian].

20. Law of Obligations Act (Estonia) (Võlaõigusseadus). Riigi Teataja Part 1 (July 18, 2011), No. 21.

21. Law on Insurance (Lithuania) (Draudimo įstatymas). Official Gazette, 2003, No. 94-4246.

22. Lithuanian Lietuvos Draudimas Policy Wording //

23. Obzor po otdel’nym voprosam sudebnoi praktiki, sviazannym s dobrovol’nym strakhovaniem imushchestva grazhdan. Prezidiumom Verkhovnogo Suda Rossiyskoy Federatsii (January 30, 2013): 15–16 // [in Russian].

24. Obzor sudebnoi praktiki Verkhovnogo Suda Rossiiskoi Federatsii za vtoroi kvartal 2012 goda (October 10, 2012) // [in Russian].

25. OÜ Aravete Agro vs. Seesam Rahvusvaheline Kindlustuse AS. Supreme Court of Estonia, Case No. 3-2-1-59-05, 2005 // [in Estonian].

26. OÜ Baltic Group Investments vs. AS If Eesti Kindlustus. Supreme Court of Estonia, Case No. 3-2-1-64-07, 2007 //

27. OÜ Jõe Motell (pankrotis) vs. AS ERGO Kindlustus. Supreme Court of Estonia, Case No. 3-2-1-131-04, 2004 // [in Estonian].

28. Principles of European Insurance Contract Law //

29. Russian Civil Code (RF Federal’nyi Zakon “Grazhdanskiy Kodeks Rossiyskoy Federatsii”) (November 30, 1994, with subsequent amendments). No. 51-FZ, SZRF (1994), No. 32, item 3301.

30. Russian Supreme Court Decision No. 5-B12-24 of April, 24 2012 //;base=ARB;n=274209 [in Russian].

32. Seesam Latvia Terms and Conditions of Individual Property Insurance //

33. The Civil Code of the Republic of Lithuania (Lietuvos Respublikos Civilinis kodeksas). Official Gazette, 2000, No. 74-2262.

34. The Insurance Contract Law (Latvia) (Par apdrošināšanas līgumu). Latvijas Vçstnesis (June 30, 1998), No. 188/189, as amended (April 4, 2007), No. 56.

35. Vakuutuslautakunnan ratkaisutietokanta, 15.12.10, Case No. VKL 182/07 // [in Finnish].

36. Vakuutuslautakunnan ratkaisutietokanta, August 30, 2007, Case No. VKL 312/07 // [in Finnish].

37. VTB Strakhovanije vs. Hotel Development Kompani. Russian Ural Arbitration Court, Case No. А60-45635/2010 //;base=AUR;n=126527 [in Russian].

38. Vytautas Lapėnas vs. BTA Draudimas. Supreme Court of Lithuania, Case No. 3K-3-545/2007 // [in Lihtuanian].

Baltic Journal of Law & Politics

A Journal of Vytautas Magnus University

Journal Information

CiteScore 2016: 0.13

SCImago Journal Rank (SJR) 2015: 0.102
Source Normalized Impact per Paper (SNIP) 2015: 0.276

Target Group researchers and scholars in the fields of law and politics, with an acute interest in the cross-pollinations of disciplines, comparative approaches to regional issues, and active dialogue on pressing contemporary issues of theoretical and practical import.


All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 367 367 77
PDF Downloads 84 84 12