Breach of the duty of disclosure

What is a breach of the duty of disclosure?

If you apply for supplementary insurance, you must answer the insurer’s questions about risk and health truthfully and completely. This obligation is called the duty of disclosure. A breach of the duty of disclosure occurs if you have stated incorrectly or concealed a material fact that you were asked about and that you knew or should have known. In health insurance, this is almost always about the health questionnaire in the insurance application.

The term comes from the Insurance Contract Act (ICA). It applies to all private insurance, including household contents or life insurance. With health insurers, it concerns supplementary hospital insurance, supplementary outpatient insurance, dental insurance and daily allowance insurance under the ICA.

Basic health insurance under the Federal Health Insurance Act (KVG) is not affected. There, the insurer asks no health questions, and it must accept every person subject to compulsory insurance in its area of activity. Even if the insurer cancels your supplementary insurance because of a breach of the duty of disclosure, your basic health insurance remains in place.

Even an oversight can be enough. Under the law, what matters is whether you knew or should have known the fact and whether you were asked about it.

How it works

A breach of the duty of disclosure usually only comes to light when you claim benefits. The insurer then checks medical reports or earlier bills and finds that a treatment before the start of the contract is missing from the application. What happens next:

1. The insurer becomes aware. A deadline of 4 weeks runs from the day on which the insurer learns of the breach.
2. Cancellation. Within this deadline, the insurer can cancel the contract, in writing or in another form that allows proof by text. The cancellation takes effect as soon as it reaches you.
3. Consequences for benefits. The insurer does not have to pay for claims that have already occurred insofar as the concealed fact influenced their occurrence or extent. If it has already paid for them, it can demand the money back.
4. No cancellation. If the insurer lets the deadline pass, it can no longer cancel because of this breach.

If a contract covers several people, for example a whole family, and the incorrect statement only concerns one of them, the insurance remains in place for the others if the insurer would have insured them alone on the same terms (Art. 7 ICA).

Legal basis

Art. 4 ICA sets out the duty of disclosure: you must disclose all material risk facts that you know or should know, on the basis of the questionnaire or other questions. Facts about which specific and unambiguous questions are asked are deemed material (Art. 4 para. 3 ICA).

Art. 6 ICA governs the consequences. Para. 1 gives the insurer the right to cancel if you have stated incorrectly or concealed a material fact that you knew or should have known and that you were asked about. Para. 2 limits this right to 4 weeks from the time the insurer becomes aware of it. Para. 3 governs benefits: they only cease for claims that have occurred insofar as the concealed fact influenced their occurrence or extent; the insurer can reclaim benefits already provided.

Art. 8 ICA protects you in 6 cases. The insurer may not cancel despite a breach of the duty of disclosure if:

• the concealed fact ceased to exist before the insured event occurred,
• the insurer itself caused the incorrect statement,
• the insurer knew or should have known the concealed fact,
• the insurer knew or should have known the correct version of the incorrectly stated fact,
• the insurer has waived its right to cancel,
• you did not answer a question at all and the insurer nevertheless concluded the contract (unless the answer clearly follows from your other information).

Example: cancellation after a hospital bill

Marco, 52, took out supplementary hospital insurance for the semi-private ward four years ago. In the application, the insurer asked about hospital stays in the last five years. Marco concealed a hospital stay one year before the application. He is now being treated in hospital again for the same complaint and also has a knee operation after a fall.

What this means for you

If you receive a cancellation because of a breach of the duty of disclosure, check the following points:

1. Deadline. When did the insurer learn of the fact, and when did the cancellation arrive? If more than 4 weeks passed in between, the cancellation can be challenged.
2. Question. Were you asked about exactly this fact, and was the question clearly worded? Ask for a copy of your application (Art. 11 para. 2 ICA).
3. What the insurer knew. Did the insurer already know about it, for example from bills under basic health insurance? Then Art. 8 ICA may apply.
4. Connection. The insurer may only refuse benefits for cases connected with the concealed fact. Ask for reasons for each case.
5. Ombudsperson. In the event of a dispute, the Office of the health insurance ombudsperson mediates free of charge, including for supplementary insurance under the ICA.

If you need new supplementary insurance after a cancellation, you will have to answer health questions again, and the new insurer can add a reservation or turn you down. The comparison of supplementary insurance shows which insurers offer which supplementary benefits; you will find the individual insurers under health insurers. You compare basic health insurance independently of this in the premium calculator.

If you would like advice, you can submit an enquiry.

Common mistakes

• Not reacting to the cancellation. Check the deadline, the question and the connection before you accept the cancellation.
• Thinking all benefits are lost. The insurer may only refuse benefits for cases connected with the concealed fact.
• Cancelling your basic health insurance. It is not affected. Switching basic health insurance is possible independently of this at the normal deadlines.
• Leaving something out again in the new application. A second breach of the duty of disclosure has the same consequences.

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