Indemnity clauses, ESG and AI – three insurance trends in Denmark

At the Danish law firm Horten, partner Christina Steen and lawyer Ninna Thalund have a wide knowledge of trends on the insurance market, regarding both regulatory and dispute matters. Christina and Ninna highlight three significant trends.

Three significant trends

(1) Increased focus on indemnity clauses as alternative or supplement to D&O policies

More and more often companies and their directors and officers seek advice regarding indemnity clauses, specifically relating to the legal effect of such clauses, and whether a set-up with both an indemnity clause and a D&O policy is proper.

When dealing with a set-up including both an indemnity clause and a D&O policy, it is important to make sure that the indemnity clause is in accordance with both the Danish Act on Public and Private Limited Companies and the company’s articles. Furthermore, such set-up has to respect the nature of the D&O policy, meaning that the insured still is to be the considered decision-maker with regards to the legal proceedings unless the indemnity clause sets out fair and legal modifications, which are to be respected.

(2) ESG – liability

In the years to come, comprehensive EU requirements for sustainability will put ESG at the top of the agenda of many boards and executive boards. The requirements will not only affect large companies which are covered directly by the legislation. Sub-suppliers and small companies in the value chain will also have to address the requirements. Danish legislation does already set out ESG requirements, eg the Danish Accounts Act.

Failing to meet EU requirements and Danish legislation is likely to be the basis for D&O claims, and accordingly management teams can request advice on how to meet the legislation and insurers have increasing considerations on relevant insurance cover.

(3) Product liability – AI

All over the world artificial intelligence and the use hereof is essential to a huge part of business areas, and Denmark is no exception.

Using or considering to use AI to support the performance of specific tasks or generally to carry out work processes implies that one considers any possible consequences of the European Commission’s proposal for a regulation on AI – notwithstanding that the proposal is not yet finally processed or adopted by the EU.

The EU regulation aims to make it easier for victims of AI-related damage to get compensation. New regulation will ensure that claimants benefit from the same standards of protection when harmed by AI products or services, as they would if harm was caused by ‘non-AI products’. New legislation is expected to make it more clear whether AI claims are to be considered a product liability claim or a professional indemnity claim – or both.

The use of AI may be essential for the future business and any management decision related to such use will be a potential basis for a D&O claim, and accordingly the use of AI raises quite a wide aspect regarding liability issues.

Horten’s insurance team

The team consists of 15 people.

The practice
  • Horten’s insurance team is particularly known for its contentious work handling complex and high-value cases, notably relating to D&O, professional liability, warranty and indemnity insurance, crime, cyber, product liability, construction liability, property, coverage issues and personal injury.
  • Horten provides full-service advice on non-contentious matters to the insurance sector.
  • Horten provides regulatory advice.
  • Horten’s business concept focuses on co-operation between the different teams.
  • As part of Horten’s business concept, Horten’s insurance team assists Horten’s M&A team with advice in relation to underwriting of warranty and indemnity insurance.
The clients and the team
  • The team is advising the vast majority of major insurers and brokers active in the Danish market on an ongoing basis as well as major insurers active in foreign jurisdictions.
  • The main focus of the Horten insurance team is complex commercial insurance disputes, often with cross-border and international elements. We regularly represent international clients and we often work in close co-operation with lawyers based in inter alia United Kingdom, Germany, Sweden or USA.
  • The team sets apart from other firms by having detailed knowledge of the entire universe of insurance law as members of the team have previous experience from working in insurance companies.
  • D&O and professional indemnity expert Christina Steen (partner) acts for a number of insurers in high-profile cases.
  • Ninna Thalund (lawyer) advises on litigation and commercial disputes, especially within damages and insurance.
  • Christina and Ninna have built up Horten’s Financial Lines Network which is a ‘by invitation only-network’ facilitated by Christina and Ninna. The network focuses on insurance issues within the area of the financial line portfolio, and all the significant insurers and brokers in the Danish market participate as a part of the network group.

Partner Christina Steen

Christina Steen is head of Horten’s insurance team. Christina has in-depth knowledge of damages and insurance in commercial disputes and arbitration. She advises – among others – on disputes within financial lines (professional liability, liability of executives and board members and crime and cyber insurance), and product liability. By virtue of her work with professional liability, Christina has dealt with a number of legal areas as the representation of lawyers, auditors and technical advisors touches on numerous areas.
Christina is well known as a strategic, eloquent, and very experienced litigator; skills which she takes advantage of before the Danish courts, including the Supreme Court, as she is among the litigators who has the right to appear before the Supreme Court.

Additionally, Christina advises in regulatory matters related to insurance, and with a background in the insurance industry she has wide experience drafting and interpreting insurance and policy conditions within a wide range of insurance products. Christina therefore often advises on questions concerning insurance cover and provides ‘legal reviews’ in connection with the approval of insurance conditions.

Lawyer Ninna Thalund

Ninna Thalund specialises in professional liability, liability of executives and board members (D&O), IDD and in matters concerning insurance cover. Much of her work involves complex insurance matters, often with cross-border elements.

Ninna has conducted a number of cases regarding professional liability for lawyers, auditors, architects, engineers, executive officers and board members.