The natural hazards pool

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In the cantons without a public monopoly, private insurers cover buildings and contents against natural hazards under a regime defined by federal law. The Insurance Supervision Ordinance requires that fire insurance for buildings and contents must include cover against natural hazards such as floods, storms, hail, avalanches, snow pressure, rockfall and landslides. The Ordinance also fixes the premium rates and the limits of cover.¹ Earthquakes are explicitly excluded from this compulsory cover.

To carry the natural hazard risks, the private insurers have created a pool, the Elementarschadenpool, through which they share large losses according to their market shares.² The pool combines the solidarity among policyholders that the uniform premium rates impose with solidarity among insurers. It reflects the Swiss preference for solutions in which private institutions take on public tasks under a framework that the state defines.

The two systems, public monopolies and private insurers in a pool, together achieve near-universal cover of buildings against natural hazards other than earthquakes. Switzerland is in this respect better protected than most European countries, where cover against floods and storms is often voluntary and many property owners remain uninsured. The floods of 2005 and the storms of the past decades were absorbed by these systems without major disruption.³ The exception of earthquakes, however, leaves the country with a significant gap in its protection, which is particularly relevant for Basel.

Notes

See Articles 171 et seq. ISO on the compulsory inclusion of natural hazard cover in fire insurance by private insurers and the uniform premium rates and limits. To be verified. ↩
On the Schweizerischer Elementarschaden-Pool (ES-Pool) of the private insurers, see the publications of the Swiss Insurance Association. To be verified. ↩
On the floods of August 2005 in Switzerland and the claims borne by the cantonal building insurers and the private insurers, see the publications of the VKF and the Swiss Insurance Association. Figures to be verified. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.

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Dr Alexander Ressos, TEP

Rechtsanwalt/Attorney-at-Law

I am a Swiss attorney-at-law and also admitted as a solicitor in Hong Kong and in England & Wales, with almost 25 years of experience.

Together with my multilingual team, including Chinese, Japanese, Korean, Russian, Ukrainian and French native speakers, I advise companies and their owners from around the world on the full range of banking, corporate, commercial and tax law matters in Switzerland, including international tax planning, fiduciary services, and legal family office services including immigration & relocation or real estate investments. My practice has a particular focus on clients from growth and frontier markets in Greater China, Central Asia and the Caucasus, the rest of Asia, the Middle East, Africa and Latin America, and I equally advise clients from Europe and North America. Through an affiliated Swiss trust company, we also take care of the incorporation and ongoing administration of their companies and other structures, including accounting, tax returns and corporate secretarial services, and I serve as a professional director where required. With the support of a network of first-class cooperation partners, I also implement solutions worldwide.

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The natural hazards pool

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