(1) If the policyholder has failed to give notice of an insured risk, or of the agreed basis on which the premium is to be calculated, or to apply for the cover note, or has made a mistake in so doing, the insurer is not obliged to effect payment. This does not apply if the policyholder has neither violated the duty to give notice and file an application intentionally, or by acting with gross negligence, and the notice given or the application submitted, or the mistake is corrected without undue delay after he or she learns of the mistake.
(2) If the policyholder intentionally violates the duty to give notice and file an application, the insurer may terminate the contract without notice. The insurance of individual risks for which the insurance cover has begun continues if no other agreements have been reached which extend beyond the end of the open policy, until such time as the agreed term of the insurance of these individual risks ends. The insurer may further demand payment of the insurance premium which would have had been payable until the termination becomes effective if the policyholder had met the duty to give notice.