Ukraine's State War Risk Insurance for Business Assets: Key Updates Effective January 1

Launch of the State Insurance Mechanism

According to Кабмін: On January 1, 2023, Ukraine activated a state-backed mechanism to insure business property against war-related risks. This initiative, administered by the Export Credit Agency to ensure effective implementation, has been updated with changes that broaden coverage to include equipment, streamline the application process, and more clearly define risks and compensation limits. This program is a critical component of Ukraine's economic resilience strategy during the ongoing conflict.

The first five business applications for the program are already being processed. Notably, compensation now extends beyond real estate to cover production equipment, including machinery, apparatus, tools, and vehicles. To apply, businesses no longer need to submit a property valuation report, as entrepreneurs can now self-declare the estimated amount of potential loss. However, an official damage assessment will still be required in the event of actual destruction.

Revised Compensation Terms

Under the new terms, compensation is provided not only for direct hits from missiles or artillery but also for damage caused by shockwaves, falling drones, cluster munitions, shrapnel, and other indirect weapon effects. The compensation limit is set at up to 10 million UAH for property or up to 1 million UAH for insurance premium reimbursement. Crucially, this limit now applies separately to each legal entity, rather than being aggregated across all related parties.

Compensation covers property damaged or destroyed from January 1, 2026 onward. This measure is part of the broader 'Made in Ukraine' policy. The government maintains ongoing dialogue with businesses, communities, and regions, allowing for continuous refinement of the mechanism based on direct feedback from entrepreneurs.

As noted by Yuliia Svyrydenko, these updates result from systematic work with regions and businesses, who are already sharing practical experience in using the mechanism.

State support continues to operate along two tracks:

• Direct compensation for losses to enterprises in frontline regions;
• Partial reimbursement of insurance premiums for businesses in the rest of the country.

The introduction of this state war risk insurance mechanism is a vital step for supporting enterprises during the military conflict. By expanding coverage and simplifying procedures, it enables businesses to recover more swiftly from losses, which can positively impact Ukraine's economic stability. Given the challenging operating environment, these changes serve as crucial support for entrepreneurs, especially in high-risk frontline areas. The government's commitment to further improving the mechanism demonstrates its responsiveness to the evolving needs of the business community and society.