Insurance companies’ obligation to indemnify the insured

In decision no. 13897 of 20 May 2024, the Court of Cassation ruled once again in the matter of professional indemnity insurance.
In case at hand, an insurer filed an appeal with the Court of Cassation against a ruling an Appeal Court, which had recognized a lawyer’s right to direct indemnification in the event of a proven professional error, even no evidence of the compensation to the injured third parties had been provided. According to the insurance company, there is no obligation to indemnify the insured in the absence of a specific request for compensation or an effective quantification of the damage, since there is a risk of unjustified enrichment of the professional if he does not forward the sums received from the insurance company to the injured party.

The Court of Cassation, in rejecting the action of the insurance company, confirmed the principle according to which “the obligation to indemnify the insured party for what the latter must pay to the third party cannot be said to exist only with reference to the moment when the credit of the injured third party becomes liquid and collectible, if the damage caused by the liable party is not seriously disputed and the insurer has not proceeded after the notification of the claim received from the insured party, since it arises as a result of the civil liability deriving from the insurance contract, namely at the moment of the realization of the risk of indemnification.”

On the basis of this principle, it can be concluded that:
– The insurer’s obligation to indemnify arises at the time of the occurrence of the harmful event, since it coincides with the risk underlying the insurance contract;
– The insurer shall be deemed to be in default of his indemnification obligation, irrespective of whether the loss or damage has become liquid and payable, once the Insured has made a claim and a reasonable time has elapsed to allow the assessment of the liability and the quantification of the damage.