In its decision dated 22 March 2016, the Austrian Supreme Court (OGH) held that insurance brokers are obliged to inform their clients about the latest case law that may lead to insufficient insurance coverage for their clients. In the case at hand, the liable broker omitted to refer to a major decision in the field of medical liability (5 Ob 232/15t).
In 2001, a gynecologist specialized in the field of prenatal diagnosis consulted an insurance company regarding a professional liability insurance policy that should also cover damages resulting from inadequate information related to a child's disability ("wrongful birth"). The gynecologist took out an insurance policy that covered damages in the total amount of EUR 400,000.
At that time, the Austrian Supreme Court held that doctors are liable for increased expenses for a child in a case of wrongful birth. However, the highest Austrian court changed its jurisdiction in a major decision dated 7 March 2006 in so far, as parents were now entitled to claim compensation for the entire child support (Unterhalt), not only for increased expenses (5 Ob165/05h).
In 2007, a patient treated by the gynecologist gave birth to a child with a severe long-term disability. The parents of the disabled child filed a claim for damages in the amount of the entire child support, as the doctor omitted to inform his patient about the method of amniocentesis which violated his information obligations. The patient's claim was upheld by the courts of all instances. Although the gynecologist had liability insurance, more than half of the insurance sum was already consumed a few years earlier.
Following the decision, the gynecologist brought a claim against his insurance company due to his insufficient insurance coverage. The Supreme Court ruled that the insurance broker was obliged to act in compliance with best-risk-management strategies. Therefore, the broker should have informed his client about the new wrongful birth decision, as a major decision in the field of medical liability, as well as about the consequences of being underinsured.
However, the question of whether the gynecologist was aware of the change in case lawand whether this needs to be considered as contributory negligence (Mitverschulden) was left open by the Supreme Court and now needs to be decided again by the first-instance court.