Limitation Period (Verjährung)

Concept

A limitation period refers to the expiry of a statutorily defined period, after which a claim that otherwise exists can no longer be legally enforced, provided the party against whom the claim is asserted expressly invokes the expiry of the limitation period. The claim itself is not automatically extinguished by the limitation period, but is instead converted into an obligation that can no longer be enforced.

Commencement and Duration of the Limitation Period

In many jurisdictions, the commencement of the limitation period depends on the time the claim arose and the claimant became aware, or should have become aware, of the circumstances giving rise to the claim; the specific duration of the limitation period for claims arising from an insurance contract differs between jurisdictions and can also vary depending on the line of business.

Suspension and Interruption

The limitation period can be suspended by certain circumstances, pausing the running of the period for the duration of the suspension and resuming once it ends – a classic example is the notification of a claim to the insurer, the review of which suspends the limitation period until the insurer’s written decision is received; once the suspension ends, the limitation period may be extended by the duration of the suspension, preserving the policyholder’s fair opportunity to enforce their claim through the courts.