Swiss civil law requires that every person in Switzerland must exercise diligence and consideration in their everyday dealings with other people.
This due diligence obligation is also required of insurance policyholders, if they want to be able to receive insurance coverage.
If you, as the insured person, fail to observe basic rules relating to the prevention of losses, you may lose your eligibility to receive insurance benefits.
In insurance jargon, a failure in your obligation to take sufficient care to avoid losses, constitutes a “breach of contract”.
The duty to perform due diligence is also a key obligation in banking and wealth management. Banks and wealth managers are obligated to exercise care in the way in which they manage customer assets.
This obligation extends to a wealth manager’s organization and requires that their investment policies match the investment goals of customers.
Appropriate risk management practices also make up part of a bank’s due diligence obligations.