Kyiv and the region classified as high-risk areas: what will change for businesses and residents

The Cabinet of Ministers has decided to classify Kyiv and Kyiv region as high-risk territories. The decision is to expand the scope of the state war risk insurance program and provide businesses with additional opportunities to protect their property.

What does the status of a high-risk territory mean?

High-risk territories are regions covered by the state war risk insurance program. The corresponding list already includes Dnipropetrovsk, Donetsk, Zaporizhia, Mykolaiv, Odessa, Poltava, Sumy, Kharkiv, Kherson and Chernihiv regions. Now Kyiv and Kyiv regions are being added to them.

At the same time, the new status does not provide for the introduction of additional restrictions for the population or changes to the rules of everyday life. The decision primarily concerns work and business protection.

What will change for business

Enterprises operating in high-risk territories will be able to insure their property against war risks with partial compensation for the cost of insurance from the state.

In addition, the government increased the maximum amount of compensation for one enterprise from 3 to 5 million UAH per year. The list of property that can be insured has also been expanded: fuel and vehicles intended for its transportation and storage have been added to it.

Financial analyst Andriy Shevchyshyn noted that one of the key consequences of the decision is the access of businesses to compensation in case of damage or destruction of property as a result of the war. At the same time, the new status, according to his assessment, should not directly affect bank lending, since financial institutions use their own risk assessment criteria.

Are there any problems with the implementation of the program

At the same time, experts are paying attention to the issue of financing compensation and reinsurance of war risks. Vice President of the Chamber of Commerce and Industry Rostyslav Korobka emphasized that reinsurance companies, in particular foreign ones, play an important role in insuring such risks.

There also remains the question of the availability of sufficient funding in the state budget to pay compensation to businesses. Financial analyst Andriy Shevchyshyn, in particular, drew attention to this.