By KYIV. Nov 15 (Interfax-Ukraine) – Current power outages are not subject to insurance compensation, since they are not an insured event as a reason for interruption in production, this is evidenced by a survey of market participants conducted by Interfax-Ukraine.
"The power outages that are happening right now are not an insured event as a downtime reason for standard business interruption insurance contracts," Viacheslav Havrylenko, Deputy Chairman of the Board of ARX and CEO of ARX Life, said.
This is also confirmed by head of the corporate insurance department of the INGO insurance company Serhiy Kryvosheev.
"Interruption in the supply of electricity or other utilities has always been the standard exception to coverage and remains so. Moreover, the risk of business interruption is not a cover that can be bought separately. It is provided as an extension of a property insurance contract. Accordingly, from a business interruption in production, such losses are covered that occurred as a result of an accident insured under a property insurance contract," he explains.
According to Kryvosheev, there are certain extensions to the coverage of production interruption: damage to supply routes or access to a property (for example, in the event of the destruction of a road laid to a property, which, as a result, makes it impossible to ensure the production process). However, these cases are still tied to material damage.
At the same time, military risks are a standard exception to property insurance contracts. Previously, such coverage was issued separately, but now it is not provided under martial law, the expert specified.
"The INGO insurance company continues to insure production interruption, but we are extremely careful in assessing the risk and its cost. The problem is that in wartime conditions, supply chains are disrupted much more strongly. If earlier in the event of a production or logistical failure, recovery was fairly fast, today this process takes much longer, which, accordingly, leads to an increase in potential damage," the head of the department explained.
