Insurance : Exclusion of coverage: lack of precision in one exclusion ground no longer automatically renders the entire clause void

In a series of rulings handed down on September 17, 2026 (Nos. 25-12.441, 25-12.442, 25-12.443), the Second Civil Chamber of the Court of Cassation reversed its case law regarding the penalty for partially imprecise exclusion clauses.

This development marks a significant shift: the lack of precision in a single exclusion ground no longer, in itself, renders the entire clause inapplicable.

THE PRINCIPLE

Article L. 113-1 of the Insurance Code requires that coverage exclusions be “formal and limited.”

An exclusion fails the “formal” requirement when it relies on imprecise criteria or requires interpretation to determine its scope.

This requirement serves a specific purpose: upon reading the contract, the insured must be able to identify the situations in which coverage will not apply.

PREVIOUS CASE LAW

Until now, the Court of Cassation held that when a clause combined several exclusion grounds, the lack of precision in just one of them rendered the entire clause inapplicable (Cass. 2e civ., June 17, 2021, No. 19-24.467).

In other words, an insured person whose loss fell under a perfectly clear exclusion could avoid its application by citing the lack of precision in another provision—even one unrelated to their specific loss. This approach had drawn significant criticism, as it effectively disregarded exclusion clauses whose clarity was otherwise undisputed.

FACTS

The issue arose again in litigation concerning business interruption losses linked to the health crisis.

In this case, a brasserie, unable to welcome the public during the spring of 2020, sought coverage under its insurance policy. The insurer denied the claim based on a clause specifying two grounds for exclusion:

• an epidemic or pandemic situation;
• deliberate violation of the Labor Code and regulations governing the conduct of the profession.

The policyholder argued that the second exclusion was broad and imprecise, rendering the entire clause inapplicable.

THE REVERSAL OF PRECEDENT

The Court of Cassation dismissed the appeal and expressly abandoned its previous case law.

It ruled that when a clause lists multiple grounds for exclusion, the requirement for clarity and precision must be assessed for each ground individually, rather than for the clause as a whole.

Consequently, the exclusion regarding an epidemic or pandemic situation—which was unambiguous and the only one applicable to the loss—could validly be invoked against the policyholder.

The Court of Cassation justified this shift by seeking a balance between protecting the policyholder and the insurer’s economic risk assessment.

It noted that a policyholder is capable of understanding the scope of a clear exclusion, even if another exclusion within the same clause lacks such clarity. It adds that the purpose of an insurance contract is to cover a risk in exchange for a premium: the insurer is not required to cover a loss for which it received no premium, provided the exclusion it invokes is precise.

THE CAVEAT

This reversal of precedent comes with a significant caveat: the invalidity extends to the entire clause if the imprecise exclusion “affects the understanding” of that clause.

The Court of Cassation does not specify the exact scope of this caveat. Open-ended phrases included in a list (such as “and others,” “including,” or “such as”) could therefore continue to undermine the validity of the exclusions surrounding them.

KEY TAKEAWAYS

• An imprecise exclusion no longer automatically renders other exclusions within the same clause inapplicable.
• Each exclusion must be assessed individually.
• However, if the imprecision of one exclusion affects the understanding of the clause as a whole, the sanction may still extend to the entire clause.