duty of disclosure

Which translation, when

Why

Duty of disclosure in an insurance context is the vorvertragliche Anzeigepflicht of § 19 VVG, and the entry matters because English and German cut the duty differently. The common-law tradition speaks of utmost good faith and expects the applicant to volunteer what a prudent insurer would want to know. German law runs on questions: until he makes his contractual declaration the policyholder must disclose the risk circumstances known to him which are material to the insurer’s decision to contract on the agreed terms and about which the insurer has asked in text form, and the duty also covers questions put after his declaration but before acceptance. What was never asked is, as a rule, outside the duty, though § 22 VVG expressly leaves untouched the insurer’s right to avoid the contract for fraudulent misrepresentation, a route that runs beside the ladder below and is not conditioned on the warning. The consequences of a breach form a ladder rather than a single sanction. The insurer may withdraw, § 19 Abs. 2; withdrawal falls away where the policyholder acted neither intentionally nor with gross negligence, and the insurer is left with termination on one month’s notice, Abs. 3; and where he would have concluded the contract even with knowledge, if on different terms, both withdrawal for gross negligence and that termination are excluded and the different terms become part of the contract, Abs. 4. Above all this sits the warning requirement: the insurer has these rights only if he drew attention to the consequences of a breach by a separate communication in text form, § 19 Abs. 5, and loses them entirely if he knew the undisclosed circumstance. The category behind the duty is worth naming for the translator, because it has no clean English equivalent: German insurance law works with Obliegenheiten, requirements the insurer cannot enforce by action but whose breach costs the policyholder his cover. For contractual ones § 28 VVG grades the outcome, full release on intent, proportional reduction on gross negligence, and no release where the breach was causal for neither the insured event nor the extent of the liability, fraud aside. Rendering Obliegenheit simply as obligation loses precisely that structure, and the general good-faith vocabulary is held by its own entry.

Typical mistakes

• The German duty is tied to questions asked in text form, § 19 Abs. 1 VVG, so translating a common-law duty to volunteer material facts as if it applied overstates what the applicant owes.
• All the insurer’s remedies depend on a separate warning in text form, § 19 Abs. 5 VVG, so presenting withdrawal as automatic on any misstatement skips the decisive step.
• An Obliegenheit is not an enforceable obligation but a condition of cover, so rendering it as obligation loses the graded sanctions of § 28 VVG.

What matters

Preparing a German application form or a coverage dispute letter: the wording should tie the disclosure duty to the questions asked in text form, name the remedy actually available on the § 19 ladder, and check whether the separate warning was given.

Examples

More notes on these sections

good faith Treu und Glauben

insured event Versicherungsfall