Soft and hard clauses: what do you need to know?

Terms and conditions

Jan 2023

Soft and hard insurance clauses

In practice, insurers use various types of warranty clauses in insurance policies to prevent losses. Failure to comply with these can have major financial consequences. How can this be countered?

What is a warranty clause

With warranty clauses, insurers impose additional obligations. To prevent fire, insurers require various preventive measures, ranging from inspected electrical installation to placing outdoor containers at a sufficient distance from business premises.

There are two types of warranty clauses: hard and soft.

Hard clauses

A hard clause assumes that the provision is always met. If the requirements are not met and damage is caused as a result, the insurer may not compensate the loss in its entirety.

Soft clauses

When an insurer includes a soft clause, it is taken into account that there may be situations where there is non-compliance. In the event of non-compliance with the warranty clauses in the event of a claim, only an increased deductible is charged, as a rule it is a maximum of 10%.

So these additional obligations can have major financial implications. Especially in the case of hard clauses. Therefore, always check what kind of warranty clauses apply to the different policies. Make sure these are met so that the insurance will do its job in the event of a claim.

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