OGH on Limitation in Legal Expenses Insurance

Apr 30, 2026 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has provided guidance regarding the conditions under which a policyholder’s claim for coverage from their legal expenses insurer may be rendered time barred. 

The claimant in the case at hand had obtained a legal expenses insurance policy from the defendant insurer. The defendant’s general terms and conditions, which constituted the foundation of the insurance contract, state: ‘For claims involving personal injury, property damage, or financial loss resulting from an insured personal injury or property damage, the insured event is considered to be the underlying loss-causing occurrence giving rise to the claim. The date of the insured event is regarded as the time of occurrence of this loss-causing event.’

The plaintiff is requesting clarification concerning the coverage of legal expenses

Due to construction activities on the adjacent property, cracks developed in the plaintiff’s buildings, which were only discovered by the plaintiff approximately one year later. Additionally, a stone comparable in size to a hay bale detached from a stone wall constructed on the neighbouring property and fell into the plaintiff’s garden. The claimant is currently requesting a declaration from the legal expenses insurer affirming its obligation to provide coverage for legal expenses related to the pursuit of injunctive relief and damages claims. 

Lower courts: Claim dismissed due to time limit

Pursuant to Section 12(1) of the Austrian Insurance Contracts Act (Versicherungsvertragsgesetz, hereinafter VersVG) and Section 1478 of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB), the limitation period applicable to policyholders commences at the point when the right becomes exercisable, meaning when there are no legal impediments to its enforcement.

With respect to legal expenses insurance, the limitation period commences when the claim for legal expenses becomes due. As established by OGH case law, pursuant to Section 12(1), first sentence, of the VersVG, the limitation period for such claims arises when the policyholder is required to protect their interests, can reasonably anticipate incurring legal costs, and intends to utilize legal expenses insurance. It should be noted that this timing cannot be determined universally; each situation must be assessed on its individual merits. 

Claim for legal expenses coverage is time-barred

The limitation period commenced when the policyholder became aware in 2019 of construction activity on the neighbouring property that resulted in damage to his own property. Consequently, the limitation period had lapsed by the time the policyholder first contacted the legal expenses insurer regarding the matter in 2023.

OGH 7 Ob 210/25w (21 January 2026)