{"id":706249,"date":"2026-01-19T19:31:44","date_gmt":"2026-01-19T17:31:44","guid":{"rendered":"https:\/\/eba.com.ua\/?p=706249"},"modified":"2026-01-21T19:43:49","modified_gmt":"2026-01-21T17:43:49","slug":"protecting-business-in-ukraine-a-comprehensive-guide-to-war-risk-management-and-insurance","status":"publish","type":"post","link":"https:\/\/eba.com.ua\/en\/protecting-business-in-ukraine-a-comprehensive-guide-to-war-risk-management-and-insurance\/","title":{"rendered":"Protecting business in Ukraine: a comprehensive guide to war risk management and insurance"},"content":{"rendered":"<p>Since the full-scale invasion in February 2022, the insurance market in Ukraine has undergone a fundamental transformation. Initially shocked and paralysed\u2014with foreign reinsurers exiting and local policies excluding war risks\u2014the market has now adapted, and now includes a sophisticated ecosystem of international guarantees, state programmes, and private market solutions.<br \/>\nThe following guide outlines multi-layered protection strategies, ranging from the new state compensation mechanism launching 2026 to established international political violence (<strong>PV<\/strong>) instruments.<\/p>\n<h4 role=\"heading\" aria-level=\"2\"><strong>I. Understanding the risk: technical context<\/strong><\/h4>\n<p>Before selecting a mechanism, it is crucial to understand how &#8220;War Risks&#8221; are defined in insurance contracts to avoid coverage gaps.<\/p>\n<ul>\n<li><strong>War Risks vs. Political Violence<\/strong>: Standard policies often distinguish between &#8220;War&#8221; (i.e. hostile acts, military operations) and &#8220;Terrorism&#8221; (ideologically motivated violence). International &#8220;Political Violence&#8221; (PV) wordings are broader, often covering revolution, insurrection, and civil commotion.<\/li>\n<li><strong>Critical exclusions<\/strong>: most standard war-risk policies still exclude:\n<ul>\n<li><strong>Cyber attacks<\/strong>: often excluded under the &#8220;CL380&#8221; clause.<\/li>\n<li><strong>CBRN<\/strong>: chemical, biological, radioactive, and nuclear risks.<\/li>\n<li><strong>Five powers clause<\/strong>: war between the major powers (US, UK, France, China, Russia) is typically excluded from standard reinsurance treaties.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h4><strong>II. Latest development: state support and compensation<\/strong><\/h4>\n<p>The Ukrainian government has introduced a long-awaited procedure for the partial compensation of war damage and war-risk insurance premiums (Resolution No. 1541).<\/p>\n<p><strong>Effective 1 January 2026<\/strong>, this mechanism administered by the Export Credit Agency (<strong>ECA<\/strong>) offers:<\/p>\n<ul>\n<li><strong>Compensation for damages<\/strong>: up to UAH 10 million for destroyed or damaged assets (e.g. buildings, equipment) in high-risk regions.<\/li>\n<li><strong>Premium reimbursement<\/strong>: partial reimbursement of war-risk insurance premiums\u2014up to UAH 1 million per year\u2014for businesses purchasing policies in Ukraine.<\/li>\n<\/ul>\n<p>The ECA\u2019s mandate was previously expanded to insure domestic investments against war risks, creating a foundation for this new compensation capability.<\/p>\n<h4><strong>III. Private market solutions: the Lloyd\u2019s facility<\/strong><\/h4>\n<p>For broader coverage beyond state limits, private insurance remains essential.<\/p>\n<p>The Ukraine War Risk Insurance Facility (backed by Lloyd\u2019s of London) provides standardised and scalable protection.<\/p>\n<ul>\n<li><strong>Scope<\/strong>: physical damage from missiles, drones, shelling, and explosions.<\/li>\n<li><strong>Access<\/strong>: direct access for foreign companies; local access for Ukrainian firms via fronting insurers.<\/li>\n<li><strong>Precedent<\/strong>: this builds on the success of the UNITY Facility, a USD 50 million public-private partnership launched in 2023 specifically to insure marine war risks for grain exports.<\/li>\n<\/ul>\n<h4><strong>IV. International investment guarantees<\/strong><\/h4>\n<p>For businesses with foreign capital, international instruments offer the most robust coverage (i.e. Political Risk Insurance or PRI).<\/p>\n<table class=\"table table-bordered\" width=\"\" cellspacing=\"0\" cellpadding=\"2\" data-ezattribute-width=\"undefined\" data-ezattribute-border=\"undefined\">\n<tbody>\n<tr>\n<td>\n<p><strong>Instrument<\/strong><\/p>\n<\/td>\n<td>\n<p><strong>Key Details &amp; Coverage Limits<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>MIGA (World Bank)<\/p>\n<\/td>\n<td>\n<ul>\n<li><strong>Coverage<\/strong>: Up to 90% of investment value.<\/li>\n<li><strong>Term<\/strong>: Up to 15 years (extendable to 20 in some cases)\u00a0<\/li>\n<li><strong>Programmes<\/strong>: Includes a &#8220;Small Investment Programme&#8221; (<strong>SIP<\/strong>) for projects under USD 10m.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>DFC (USA)<\/p>\n<\/td>\n<td>\n<ul>\n<li><strong>Capacity<\/strong>: Up to USD 1 billion per project.<\/li>\n<li><strong>Term<\/strong>: Up to 20 years.<\/li>\n<li><strong>Scope<\/strong>: War, terrorism, civil disturbance, and business interruption.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>KUKE (Poland)<\/p>\n<\/td>\n<td>\n<ul>\n<li>Uniquely provides <strong>100% reinsurance<\/strong> to Polish insurers covering sales or investments in Ukraine.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p>Bilateral Agencies<\/p>\n<\/td>\n<td>\n<ul>\n<li><strong>SACE (Italy)<\/strong>: Coverage up to 99% for Italian strategic investments.<\/li>\n<li><strong>German government \/ PwC<\/strong>: Investment guarantees for German companies.<\/li>\n<li><strong>Bpifrance<\/strong>: <em>Assurance Investissement <\/em>for French entities.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h4><strong>V. CMS strategic advisory: a multi-layered approach<\/strong><\/h4>\n<p>The legal framework governing insurance in Ukraine was updated with the new Law &#8220;On Insurance&#8221; (effective Jan 1, 2024), aligning local regulations with EU directives. Navigating this new legal landscape requires a combined approach with legal experts.<\/p>\n<p><strong>CMS helps clients navigate the full spectrum of war-related risk management:<\/strong><\/p>\n<p><strong>1. Strategic structuring and &#8220;patchwork&#8221; coverage<\/strong><\/p>\n<ul>\n<li><strong>Gap analysis<\/strong>: CMS analyses exclusions (e.g. the &#8220;Five Powers&#8221; or CBRN clauses) to ensure a business understands its net exposure.<\/li>\n<li><strong>Hybrid solutions<\/strong>: CMS assists in pairing international PRI (MIGA\/DFC) with local coverage for physical assets to minimise uninsured risks.<\/li>\n<\/ul>\n<p><strong>2. Contractual risk allocation<\/strong><\/p>\n<ul>\n<li><strong>Force majeure<\/strong>: Drafting robust clauses that specifically address &#8220;hostile acts&#8221; and &#8220;political violence&#8221; rather than just generic &#8220;war&#8221;.<\/li>\n<li><strong>Evidence preservation<\/strong>: Providing legal guidance on documenting damage to meet the high evidentiary standards of international registers.<\/li>\n<\/ul>\n<p><strong>3. Claims and compensation<\/strong><\/p>\n<ul>\n<li><strong>ECA programme support<\/strong>: Preparing documentation for the new state compensation programme (Asset &amp; Premium reimbursement).<\/li>\n<li><strong>International arbitration<\/strong>: Structuring claims under Bilateral Investment Treaties (BITs) for uncompensated losses.<\/li>\n<\/ul>\n<h4><strong>Is your strategy up to date?<\/strong><\/h4>\n<p>If your business holds significant assets or operates in high-risk regions, relying on a single instrument is no longer sufficient.<\/p>\n<h4><strong>Next Steps<\/strong><\/h4>\n<p>We invite you to contact the CMS Team for a preliminary risk audit. We will assess your eligibility for MIGA\/DFC programs, the new ECA compensation mechanism, and private market facilities to build a tailored protection strategy.<\/p>\n<p>For more information, contact your CMS client partner or the CMS experts who wrote this article: <a class=\" external-link\" href=\"https:\/\/cms.law\/en\/ukr\/people\/ihor-olekhov\" target=\"_blank\" rel=\"noopener\" aria-describedby=\"audioeye_new_window_message\">Ihor Olekhov<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Since the full-scale invasion in February 2022, the insurance market in Ukraine has undergone a fundamental transformation. Initially shocked and paralysed\u2014with foreign reinsurers exiting and local policies excluding war risks\u2014the market has now adapted, and now includes a sophisticated ecosystem of international guarantees, state programmes, and private market solutions. The following guide outlines multi-layered protection [&hellip;]<\/p>\n","protected":false},"author":4489,"featured_media":706260,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false},"categories":[24,23],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Protecting business in Ukraine: a comprehensive guide to war risk management and insurance - European Business Association<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/eba.com.ua\/protecting-business-in-ukraine-a-comprehensive-guide-to-war-risk-management-and-insurance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Protecting business in Ukraine: a comprehensive guide to war risk management and insurance - European Business Association\" \/>\n<meta property=\"og:description\" content=\"Since the full-scale invasion in February 2022, the insurance market in Ukraine has undergone a fundamental transformation. 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