A new state program for insuring war risks for business representatives will start operating in Ukraine on October 1. It includes two separate mechanisms for frontline territories and other regions of the country. The program model has been developed and approved by Prime Minister Yulia Svyrydenko and is set to be a significant step in protecting entrepreneurs during the state of war.
This is reported by Finway
Program Details for Frontline Territories
In areas located near the front line, the Export Credit Agency (ECA) has been designated as the program operator. Within this mechanism, individual entrepreneurs and legal entities will have the opportunity to receive compensation for property losses caused by military actions. To do this, they will need to contact the ECA, pay the relevant fee, and undergo the registration procedure. The parameters for the fee amount and the maximum compensation sum are still under agreement. At the same time, payments are not provided for companies that have tax arrears or are under sanctions. The final launch of this mechanism is possible only after amendments to the legislation are made.
“In frontline regions, the program operator will be the Export Credit Agency. The idea is that individual entrepreneurs and legal entities will be able to receive compensation for property destroyed due to the war. To do this, they will need to contact the ECA, pay the fee, and register. The fee amount and the maximum payout are still being negotiated. Compensation will not be provided to companies with tax arrears or under sanctions. Changes to the legislation are still needed to launch the mechanism.”
Mechanism for Other Regions and Compensation Features
For businesses located outside the frontline areas, the program will operate on the principle of state support for insurance premiums. The mechanism resembles the existing preferential lending program “5-7-9%”: the state will partially compensate the cost of the insurance premium to reduce the rate for entrepreneurs to about 1%. For example, if the insurance contract is for 10 million hryvnias with a rate of 3%, the company will actually pay about 1%, while the rest will be covered by the state budget. The final limits on insurance amounts are still being discussed, and the main sources of funding will be determined by the Ministry of Finance — primarily budget funds and international assistance.
At the same time, market participants note that the new mechanism will not ensure widespread coverage due to limited risk appetites and coverage limits. For large businesses, the compensation limit is only 10-20 million hryvnias, so the program is most suited to the interests of small and medium-sized enterprises.