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The exclusion of a risk from the cover, by the insurer, is valid provided that the clause is explicit and limited, and this ‘contractual exclusion’ of the risk does not constitute wilful misconduct or fraud

The exclusion of a risk from the cover, by the insurer, is valid provided that the clause is explicit and limited, and this ‘contractual exclusion’ of the risk does not constitute wilful misconduct or fraud

Published on : 23/07/2026 23 July Jul 07 2026
Actualités

The insurer’s exclusion of a risk from cover is valid provided that the clause is explicit and limited, and this ‘contractual exclusion’ of the risk does not constitute wilful misconduct or fraud.

 

A company had acquired a catering business in premises situated within a block of flats under co-ownership. Following water damage in that block, a court-appointed expert concluded that the co-ownership association was liable. The purchaser sued its insurer to obtain an order requiring it to compensate the purchaser for loss of business.

 

The Court of Appeal dismissed the third-party claim brought against the insurer. The co-ownership association lodged an appeal to the Court of Cassation, arguing that the exclusion clause invoked by the insurer was void, as it was neither formal nor limited in scope. It further contended that the insured party’s breach of its maintenance obligation would only cause the event giving rise to the damage to lose its random nature if it constituted intentional or fraudulent misconduct on the part of the insured party.

 

The Court of Cassation dismissed the appeal.

 

The Court of Cassation clearly reiterates two distinct principles:

 

Firstly, pursuant to Article L. 113-1 of the Insurance Code, the insurer is released from its liability for losses and damage arising from wilful misconduct or fraud on the part of the insured.

 

Secondly, it follows from the same provision that an insurance contract may include a clause excluding cover in the event of the risk ceasing to exist during the term of the contract, without it being necessary for the insured party’s conduct—which is contractually excluded—to constitute wilful misconduct or fraud; the sole requirement imposed by this provision being that the clause be formal and limited in scope.

 

Finally, the Court of Cassation points out that assessing the validity of an exclusion clause requires an evaluation of the facts and is therefore not a purely legal matter. Consequently, this ground of appeal cannot be raised for the first time before the Court of Cassation.

Source: Cour de cassation, deuxième chambre civile, 12 mars 2026, Pourvoi n° 24-14.340 
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