Austrian OGH on Insurance Coverage for Collapsed Roof

Nov 14, 2025 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has decided if insurance should cover damage to a building and its belongings when the roof collapsed because of heavy snow.

The parties in the case at hand are covered by an ‘all-risk insurance contract’ that follows the Austrian General Conditions for Property Insurance (ABS 2017) and the General Conditions for All-Risk Property and Business Interruption (ABAR 2017), among other relevant terms.

Snow-induced static overload caused the factory roof to collapse

In January 2019, the roof experienced an initial partial collapse followed by a complete collapse. On 26 March 2019, the defendant issued a partial insurance payout of EUR 500,000 to the plaintiff. Nevertheless, in correspondence dated 27 May 2019, the defendant declined to provide further insurance coverage.

The plaintiff sought EUR 9,000,000 in compensation for damage to the building, operating equipment, business interruption, demolition expenses, and inventory loss. The defendant requested dismissal of the claim, asserting no liability for payment due to the insurance policy having been obtained under conditions of culpable underinsurance. Additionally, the defendant contended that the plaintiff acted with gross negligence by failing to promptly clear snow, reinforce the structure, and undertake reasonable mitigation measures.

The lower courts supported the claim, and the OGH affirmed their ruling.

How the OGH valuated the extent of the compensation

Article 11.2 of ABAR 2017 includes a ‘strict restoration clause’, which aims to reduce the subjective risk that could occur if policyholders were free to use compensation funds as they wished. In insurance policies based on replacement value, this clause acts as a restriction by initially allowing claims only for the current value of an item; any claim for its replacement value depends on whether repairs or replacements are made promptly. Deciding if repairs or replacements are secured must be done in good faith and is based on the specifics of each case—full assurance isn't required. Usually, signing a binding contract to restore or replace is enough. The actual language of the restoration clause defines what compensation is covered.

OGH 7 Ob 126/25t (25 September 2025)