BGH – Claims against D&O Insurance

BGH Judgment of November 19, 2025 (Az. IV ZR 66/25): Insurance coverage not automatically excluded despite insolvency maturity

The Federal Court of Justice (BGH) clarified with its judgment of November 19, 2025 (Az. IV ZR 66/25) that a delayed filing for insolvency does not automatically lead to the loss of insurance protection from D&O insurance for members of an organization. What matters instead is whether the conditions of a risk exclusion – particularly for knowing breach of duty – are actually present in the specific case.

This decision strengthens the position of policyholders and insured individuals in coverage disputes with D&O insurers. At the same time, the ruling shows that exclusion clauses must be interpreted narrowly and not applied schematically.

What is the purpose of D&O insurance?

D&O insurance (Directors & Officers) is a liability insurance against financial loss. It is intended to protect members of an organization – such as managing directors, boards, or supervisory boards – against personal claims for alleged breaches of duty. In practice, it often involves:

• Claims for damages by the company (internal liability),
• Claims by the insolvency administrator after insolvency proceedings commence,
• Third-party claims (external liability), as far as they are insured.

Many insurance terms contain restrictions, including exclusions for intentional actions or knowing breach of duty. Exactly such a clause was the subject of the decision.

Duty to file for insolvency in a timely manner

One of the central duties of company management is to timely file for insolvency in cases of insolvency or overindebtedness. Additionally, during the stage of insolvency maturity, there are generally strict guidelines for asset dispositions from the company’s assets. Violations – particularly payments made after the onset of insolvency maturity – are among the most common liability scenarios.

In the case decided by the BGH, the managing director still initiated payments from the company’s assets after the onset of insolvency maturity. The insolvency administrator therefore made claims for damages against him.

Insurer denies coverage – citing exclusion clause

The managing director had D&O insurance, which the company had concluded. However, the insurer refused payment and cited a clause whereby no insurance coverage exists if the insured knowingly breaches a duty.

The insurer argued that the managing director must have been aware of the economic crisis and the legal obligations and prohibitions. From this, he inferred a knowing breach of duty.

OLG Frankfurt: Exclusion due to cardinal duty breach

The Higher Regional Court of Frankfurt followed the insurer’s argument and supported the exemption from performance, among other things, because the managing director had violated a fundamental duty by not filing for insolvency at the onset of insolvency maturity. The court derived knowledge from this breach of duty – with the result that there should be no insurance coverage.

BGH: General conclusion of “knowing” breach not sufficient

The insolvency administrator appealed – successfully. The BGH overturned the judgment of the Higher Regional Court of Frankfurt and referred the case back for a new hearing. The central point: It is not sufficient to generally conclude a knowing breach of duty within the meaning of the insurance terms from a breach of duty (e.g., delayed insolvency filing).

The awareness must relate to the specific liability-triggering action.

The BGH made it clear that the awareness must relate precisely to the breach of duty that triggers the claim being asserted. In the specific case, it was not “only” the failure or delay in filing for insolvency that was decisive, but ratherspecific individual payments after the onset of insolvency maturity.

For an effective risk exclusion, it must therefore be established that the managing directorknew about these specific paymentsbeing legally impermissible and yet consciously initiated them. A general crisis or an abstract reference to legal obligations does not replace this individual case assessment.

Risk clauses must be interpreted narrowly

According to the reasoning of the BGH, risk exclusions in insurance conditions must generally be interpreted narrowly. They must not be applied more broadly than their purpose clearly requires. The exclusion due to knowing breach of duty significantly curtails insurance coverage and therefore must not be assumed “automatically” or schematically.

Burden of proof lies with the insurer

Also of significant practical importance is the BGH’s statement on the burden of proof: If the insurer wishes to invoke the exclusion due to knowing breach of duty, it isthey whobear the burden of proof for its prerequisites. The insurer must therefore demonstrate and, in case of dispute, prove that:

• a breach of duty objectively existsand
• the insured was aware of the illegality of their specific actions.

Indications are possible – but not a blanket presumption

According to the BGH, proof can be provided through indications. However, the blanket assumption that a managing director automatically recognizes the impermissibilityof allpayments at the maturity of insolvency does not suffice. A concrete assessment of the individual case is required, especially regarding the payment situation, information available, and decision-making processes.

Relevance for practice: improved enforceability of D&O claims

Claims for impermissible payments after insolvency maturity are common in management liability. The judgment makes it clear that D&O insurers cannot refuse coverage protection solely by pointing to a crisis or a delayed insolvency filing. Instead, they must substantiate the strict requirements of an exclusion due to knowing breach of duty in the specific case.

For corporate leaders and claimants (e.g., insolvency administrators), this may mean more clarity in assessing coverage opportunities and asserting claims in court.

Important Note

This article is for general information purposes only and does not replace individual consultation. Legal evaluation always depends on the specific insurance conditions, the facts of the case, and the current case law.

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