Cour de Cassation, second civil chamber, January 21, 2021, case No.19-13.347
Months following a climatic event affecting its crops, an agricultural company asked for compensation, but its insurer opposed the contract’s lapse of coverage for late notification of loss clause.
Article L. 113-2 4° of the French Insurance Code provides that losses must be declared within 5 days and that failing to so may lead to a lapse of coverage is the insurance contract says so and if the insurer may demonstrate that the delay in notifying the loss has caused him a prejudice.
The case was brought in the first instance court where it was ruled that the loss had been lately notified to the insurer, which lead to an aggravation as the insurer’s expert could have advised the insured on how to mitigate his loss.
In appeal, the insured claimed that the contractual clause providing for the lapse of coverage was illegal as it provided for a four-day period instead of the five-day period set forth by Article L.113-2 4°. The court of appeal of Bourges nevertheless confirmed the first instance decision on the ground that the insured had disrespected both the contractual and the legal periods of time for notifying the loss, although the contractual period of time was not in line with that of Article L.113-2 4°.
On the grounds of Articles L. 113-2 4° and L. 111-2 of the French Insurance Code, the French High Court rules that the clause of an insurance contract providing for the lapse of coverage due to the late notification of the loss shall comply with the legal minimum period of five days to be enforceable against an insured.