(1) The insurance also covers the judicial and extra-judicial costs arising from claims asserted by a third party insofar as the circumstances necessitate the expenditure. The insurance further covers expenses incurred on the instruction of the insurer by defence counsel in criminal proceedings initiated on the basis of an act which could result in the policyholder becoming liable vis-à-vis a third party. The insurer advances the costs at the policyholder’s request.
(2) If a sum insured has been determined, the insurer also reimburses the costs of a legal dispute conducted at his or her instigation, and the costs for defence counsel in accordance with subsection (1) sentence 2, insofar as they exceed the sum insured plus the insurer’s expenses for indemnifying the policyholder. This also applies to interest payments which the policyholder owes to the third party as a result of a delay in satisfying the third party occasioned by the insurer.
(3) If the policyholder is released from the obligation of avoiding the execution of a judicial decision by furnishing security or a deposit, the insurer effects payment of the security or deposit. This obligation only applies up to the amount of the sum insured; if the insurer is obliged in accordance with subsection (2) over and above that amount, the surplus amount is added to the sum insured. The insurer is released from the obligation under sentence 1 if he or she acknowledges that the third party’s claim vis-à-vis the policyholder is well founded.