On 2 December 2026 at 10:00 a.m., the IV. Zivilsenat des Bundesgerichtshofs (Fourth Civil Division of the BGH, Federal Court of Justice) will hear case no. IV ZR 253/25 concerning the reimbursement of defence costs under a D&O insurance policy. The central issue is the extent to which the insurer is liable for such expenses. The Bundesgerichtshof has not yet handed down a decision.
D&O Insurance for Corporate Officers and Senior Executives
The defendant provides insurance for corporate officers and senior executives. The claimant was the chairman of the management board of the policyholder.
The agreed cover comprised two areas:
- Liability cover applied where an insured person was held liable for damages.
- Legal expenses cover for proceedings applied to criminal proceedings initiated against an insured person due to a breach of duty.
An aggregate policy limit of EUR 25 million was stipulated for the 2019 policy period. For the 2020 policy period, this limit amounted to EUR 15 million. In addition, a supplementary limit for defence costs and a personal supplementary limit for certain insured persons were agreed for each period.
Notifications to the Insurer and Initiation of Criminal Proceedings
Notification of Suspicious Transactions
In April 2019, the policyholder informed the insurer that concerns had been raised regarding suspicious transactions and alleged actions by a member of the finance team.
In June 2020, the policyholder announced in an ad hoc disclosure that a bank balance of EUR 1.9 billion held in escrow accounts and previously reported in its favour was, in all likelihood, non-existent. Later that same month, the claimant resigned from his positions as a member and chairman of the management board.
Criminal and Civil Proceedings
Criminal proceedings are being conducted against the claimant and other individuals. The presumption of innocence applies until there is a final conviction.
In addition, numerous legal proceedings have been brought against the claimant by the policyholder’s insolvency administrator and by investors. The insurance contract issue to be determined in the appeal on points of law does not prejudge the decision on the criminal or civil allegations made against the claimant.
Dispute over the Scope of Insurance Cover
Cover Initially Denied
The defendant initially refused to provide insurance cover. Following legal disputes, it issued the claimant with a confirmation of cover whose scope was defined in detail.
In doing so, the defendant referred to the policy limit of EUR 15 million. At the same time, it stated that defence costs would be deducted from that limit.
The insurer subsequently informed the claimant on several occasions of the portion of the policy limit that remained available. In February 2024, the defendant ultimately declared that both the policy limit and the supplementary limits had been exhausted. Consequently, no further insurance cover was available.
It is undisputed between the parties that the defendant made payments to insured persons of at least EUR 15 million in addition to the supplementary limits.
The Claimant’s Claims
In his action, the claimant seeks payment of EUR 1,091,317.93. This amount relates to defence costs allegedly incurred between June 2023 and January 2024.
He also seeks a declaration from the court that the defendant is required to provide him with insurance cover. His application primarily relates to the 2020 policy period and an amount of up to EUR 15 million. In the alternative, he relies on the 2019 policy period, with a policy limit of up to EUR 25 million.
The claimant also seeks reimbursement of the legal defence costs and court costs incurred since February 2024 in the criminal and civil proceedings brought against him.
Proceedings to Date
The Landgericht Frankfurt am Main (Frankfurt am Main Regional Court) dismissed the action (LG Frankfurt am Main, judgment of 11 December 2024 – case no. 2-08 O 357/24). The appeal lodged against that judgment was also unsuccessful before the Oberlandesgericht Frankfurt am Main (Frankfurt am Main Higher Regional Court) (OLG Frankfurt am Main, judgment of 29 October 2025 – case no. 7 U 7/25).
The Oberlandesgericht granted leave to appeal on points of law. The claimant is pursuing his applications before the Bundesgerichtshof by means of this appeal.
In parallel proceedings involving a former chief accountant of the policyholder, the Oberlandesgericht Frankfurt am Main ruled that the D&O insurer sued in that case was entitled to rely on the exhaustion of the policy limit. However, the upcoming hearing concerns the separate appeal proceedings in case no. IV ZR 253/25.
Relevant Insurance Terms and Conditions
Liability Cover and Legal Expenses Cover for Proceedings
Under clause 1.1.1 of the Allgemeine Bedingungen zur Versicherung für Organmitglieder und leitende Angestellte OLA 2015 (General Terms and Conditions of Insurance for Corporate Officers and Senior Executives OLA 2015), insured persons are covered if, for the first time, a written claim for compensation for financial loss is made against them due to a breach of duty in the performance of their insured activities. Accordingly, the insurance cover includes the assessment of liability, payment of defence costs incurred in defending against unfounded claims for damages, and indemnification against valid claims for damages.
Clause 1.1.2 provides additional legal expenses cover for proceedings. Among other circumstances, this applies where criminal proceedings are initiated against an insured person for the first time due to a breach of duty. The prerequisite is that the breach of duty is capable of causing financial loss. In this respect, the insurance benefit consists of payment of the defence costs.
Precautionary Notification of Circumstances
Under clause 2.8, circumstances discovered during a policy period that are likely to result in an insured event may be notified as a precaution. The notification must identify the potential breach of duty by a specific insured person, the potential loss, and the potential claimant or proceedings.
Under the terms and conditions, an insured event arising from the notified circumstances is deemed to have occurred during the policy period in which the notification was first made.
Limitation and Deduction of Insurance Benefits
Clause 8.1 limits the insurer’s obligation in respect of all benefits arising from an insured event to the policy limit stated in the insurance policy.
Under clause 8.4, general and special defence costs are deducted from the policy limit. They are therefore not available in addition to that limit.
The aggregation clause in clause 8.7.1 provides that all insured events arising from the same breach of duty are deemed to constitute a single insured event, irrespective of the number of claims and proceedings.
Significance of the Upcoming Hearing
The Bundesgerichtshof must determine the extent to which the defendant remains liable for defence costs, taking into account the agreed policy limits, supplementary limits, deduction provisions and aggregation clause. This also depends on the policy period to which the relevant insured event must be allocated under the terms and conditions.
The decision may be significant for the interpretation of D&O insurance policies where claims are made against several insured persons in different proceedings and defence costs must be deducted from a limited policy amount. Companies, corporate officers and insured persons seeking an assessment of comparable contractual issues can contact MTR Legal Rechtsanwälte and obtain legal advice on contract law.
