Breach of Condition – Causation Counter-Evidence Clause

Purpose

Where a policyholder breaches a contractual condition – such as a safety, notification or information duty – the policy wording often threatens full or partial loss of cover. The causation counter-evidence rule softens this severe sanction: if the policyholder can prove that the breach neither caused the loss nor affected its extent, the insurer remains fully liable despite the breach.

Effect and limits

The burden of proving lack of causation lies with the policyholder, which in practice is a substantial hurdle, particularly where evidence was itself destroyed by the breach. For intentional or fraudulent breaches the counter-evidence is generally unavailable; it applies only to ordinary or gross negligence. The rule thus guards against a purely formal sanction without abolishing the behavioural function of the condition altogether.

Negotiation and practice

In claims handling, the causation question is often the central point of dispute between insurer and policyholder, for example in cases of late claims notification with no discernible prejudice to evidence-gathering. Insurers therefore document carefully what concrete effect late or omitted cooperation had on establishing the basis and amount of the claim.

Jurisdictional comparison

Switzerland embeds the causation counter-evidence generally in Art. 45 VVG and specifically for risk-mitigation conditions in Art. 29(2) VVG. Germany regulates it in Section 28(3) VVG as an exception to the sliding-scale reduction following grossly negligent breach. Austria has a comparable rule in Section 6(2) VersVG, though Austrian case law applies stricter standards to the counter-evidence for pre-contractual conditions than for post-contractual conduct duties.