Benefit Reduction for Gross Negligence (Leistungskürzung bei Grobfahrlässigkeit)

Legal Basis in Switzerland

The Swiss Insurance Contract Act distinguishes by degree of fault: where the insured event is caused intentionally the insurer is released from liability; where it is caused by gross negligence the insurer may, under Art. 14 para. 2 VVG, reduce the benefit in proportion to the degree of fault; and where only slight negligence is involved the benefit remains unreduced. In mandatory accident insurance the reduction is narrower: under Art. 37 para. 2 UVG, for non-occupational accidents caused by gross negligence only the daily allowances during the first two years after the accident are reduced, and where the insured has dependants the reduction is limited to one half; medical treatment, pensions and integrity compensation remain untouched. For accidents connected with crimes or offences, cash benefits may be reduced or refused (Art. 37 para. 3 UVG).

Germany and Austria

In Germany proportionate reduction under section 81 (2) VVG – curtailment in proportion to the severity of fault – applies to indemnity insurance. For private accident insurance as fixed-sum insurance, section 183 VVG merely provides that the insurer is released where the accident was caused intentionally; gross negligence does not trigger a reduction there, although policy exclusions such as accidents caused by impaired consciousness due to intoxication still apply. The Austrian VersVG likewise follows the principle of release from liability for gross negligence in indemnity insurance, whereas the accident insurance conditions (AUVB) generally cover gross negligence and address cases such as intoxication through specific exclusions.

Relevance for Claims and Underwriting

Under settled case law gross negligence presupposes conduct that disregards elementary precautions which any reasonable person in the same situation would observe; typical categories are drink-driving, ignoring red lights or overestimating one’s abilities in mountain sports. The reduction must be distinguished from the hazardous activity concept and from breach of policy duties. Market practice in Swiss collective and UVG supplementary wordings is the “gross negligence waiver”: the insurer waives its right to reduce and, against a loading, also pays the UVG reductions, but continues to reduce analogously to the UVG for accidents occurring in the commission of an offence or crime – such as driving under the influence of alcohol or drugs – while benefits to survivors remain unreduced. German group and sports wordings address the same situations not through a reduction but through the exclusion of accidents caused by impaired consciousness, sometimes with a fixed blood alcohol limit.