The Ukraine crisis and its consequences

The situation in Ukraine continues to be very dynamic. The impact on the economy, companies and their insurance coverage are not yet fully foreseeable. SUDVERS stands as an international insurance and risk expert also in such highly dynamic times with professional expertise at all times.

What impact will this have on companies’ insurance cover?

Read the assessment by the SUDVERS experts on the current situation:

I. General, cross-disciplinary questions

In the context of the current events surrounding the Russia-Ukraine conflict, numerous questions have arisen for internationally positioned companies in recent days. Of course, the conflict is also having an impact on the insurance coverages that usually apply worldwide.

The following questions are at the centre of attention:

  • To what extent do the embargoes restrict insurance cover, especially for risks located in Russia?
  • To what extent is insurance cover provided for insured events due to war or warlike events, especially for risks located in Ukraine?

With regard to both questions, it must be pointed out that these are very strongly either reinsurance-driven or regulatory-driven in the market and, therefore, there are often no possibilities for individual special solutions.

Embargo regulations/sanctions

As a matter of principle, internationally positioned companies must know and observe the laws, standards and thus also the embargo regulations relevant to their business model. Especially in view of current (and highly dynamic) developments, we recommend that companies closely monitor the sanction regulations.

The embargo regulations currently implemented (or being implemented) by the international community are extremely diverse:

  • The sanctions are directed against persons, institutions or organisations.
  • They can consist of import or export bans on certain groups of goods or services. In particular, there may be insurance bans in place.
  • Violations of the sanctions may be subject to penalties or fines.

EU sanctions apply directly. For insurance bans there, this means that they always apply, i.e. even if the specific insurance contract does not provide for a so-called sanction clause. Such sanction clauses, which can be found in the German insurance market in varying scope, therefore, only have a clarifying character with regard to EU sanctions. Its actual regulatory content relates solely to sanctions imposed by other states, for example, the USA. The majority of current insurance contracts are based on the following model clause of the German Insurance Association (GDV):

“There is – without prejudice to the other contractual provisions – insurance cover only insofar and as long as there are no economic, trade or financial sanctions or embargos of the European Union or the Federal Republic of Germany directly applicable to the contracting parties. This also applies to economic, trade or financial sanctions or embargoes imposed by the United States of America, insofar as this does not conflict with legal provisions of the European Union or the Federal Republic of Germany.”

With regard to the insurance prohibitions or the sanction clause, it is important to know that they do not lead to the invalidity of the entire insurance contract, but only withdraw coverage from that part of the insured risk that is the subject of sanctions.

Examples currently (as of 08.04.2022) prohibited by the EU with regard to Russia are insurance contracts:

  • For the purchase, import or supply of the following goods and technologies or for related technical support, brokering services or other services:
    • Silver, lead, certain fertilisers, timber, furniture, cement (goods), chemical products, food, glass products, aluminium panels, jet engines, ships (cf. Art. 1, Annex XXI Regulation (EU) 2022/576)
    • Coal, certain gases and oils (cf. Art. 1, Annex XXII Regulation (EU) 2022/576)
  • For natural or juridical persons, organisations or institutions in Russia or for use there for the sale, delivery, supply or export of the following goods and technologies or for related technical support, brokering services or other services:
    • Certain construction substances / materials / products / machinery, chemicals, dyes, rubber products, timber products, paper products, textiles, metal goods, engines, furnaces, tools, vehicles, generators, plants, minerals, rock (cf. Art. 1, Annex XXIII Regulation (EU) 2022/576)
    • Certain goods and technologies for shipping (cf. Art. 1 Regulation (EU) 2022/394)
    • Dual-use items (nuclear materials, plant and equipment, special materials and associated equipment, materials processing, general electronics, computers, telecommunications and “information security”, sensors and lasers, avionics and navigation, marine and naval technology, aeronautics, space and propulsion) (cf. Annex I of Regulation [EU] 2021/821 on Art. 2 of Regulation [EU] 2022/328)
    • Certain chemical and nuclear installations (cf. Art. 3b, Annex X Regulation [EU] 2022/328)
    • Aircraft, spacecraft and parts thereof (cf. Art. 3c, Annex XI Regulation [EU] 2022/328)
    • The goods and technologies listed in the “Common List of Military Equipment” (cf. Art. 4 of Regulation [EU] 833/2014)
  • For the import (if Russia is the country of origin, or export from Russia), purchase (if Russia is the location or country of origin) or transport (if Russia is the country of origin or export from Russia): certain iron and steel products (cf. Art. 1, Annex XVII Regulation (EU) 2022/428)
  • In combination with the import of goods originating in the regions of Donetsk and Luhansk not controlled by the Ukrainian government (cf. Art. 2 Regulation [EU] 2022/263)

Transport insurance and export credit insurance in particular are affected, but possibly also other branches such as indemnity insurance.

At present, insurance bans issued by other states as part of sanctions against Russia are only known from the UK (insurance services connected with aerospace products to a person connected with Russia or for use in Russia). Moreover, the sanctions clause as per the General Association of the German Insurance Industry (GDV) has, therefore, been without application. If you have any questions about alternative sanction clauses, please contact your specialist advisor.

Following information at this point: Insurance bans are only a sub-case of the numerous bans envisaged by the EU sanctions. The main focus notably is on delivery and import bans.

Current information on day-to-day sanctions regulations, of which, as mentioned, insurance bans are only a part, can be found at the Federal Office of Economics and Export Control (

Notes in connection with local insurance contracts

Local insurance contracts are concluded between a local (Russian) policyholder (subsidiaries of our clients) and a local (Russian) insurer. Accordingly, they cannot be the subject of the current European embargo measures and, therefore, remain in force to the same extent as before.

This applies at least as long as European or Russian embargo measures do not prohibit the operation of local insurance subsidiaries.

Information on connection with payment transactions to and from Russia

Now that numerous states have also applied sanctions to the financial sector by, among other things, removing Russian banks from the SWIFT system, there is the challenge that insurance benefits can no longer be transferred to Russia without further ado, irrespective of the question of the extent to which insurance cover for Russia-related risks continues to apply.

The insurance market is not yet positioning itself in this regard. It can be assumed – as of today – that any benefits, if any, will only be paid out in Germany.

Notes on possible yield losses

At the moment, reports are pouring in of companies ending their Russia-related engagement (exports to Russia or subsidiaries in Russia) out of solidarity with Ukraine.

In addition, numerous companies are either already affected by supply bottlenecks in (or from) Russia, or are acutely threatened by such supply bottlenecks.

As a result, there is a risk of considerable yield losses or collapses, which are not covered by conventional loss of earnings insurance, as the necessary coverage requirement of “insured property damage” is lacking.

Insurance cover for insured events due to war or warlike events

War is raging on the territory of Ukraine. For all classes of insurance with worldwide coverage, the question, therefore, arises for companies as to the extent to which insurance cover is available for insured events caused directly or indirectly by war or warlike acts or events.

In order to avoid incalculable accumulation risks for the insurance industry, losses due to war or warlike events (in addition to other political risks such as civil war, civil unrest, strikes, measures taken by public authorities) are generally excluded from insurance cover.

As a rule, these risk exclusions apply worldwide without regional restriction and, therefore, also apply, in particular, to the territory of Ukraine and all risks located or situated there.

In some cases, there are special sector-specific regulations, which are discussed in the respective sector-specific considerations below.

II. Sector-specific issues

Property and loss of earnings insurance

Damage due to war events is generally excluded from insurance cover in the property and loss of earnings insurance regardless of contributory causes. This applies to both direct damage caused by destruction and indirect damage caused by war-related closures, as well as the resulting loss of income.

The general remarks regarding sanctions also apply to property and loss of earnings insurance.

Liability insurance

The general explanations regarding sanctions and risk exclusions with regard to war also apply to liability insurance.

Transport insurance

War cover under the war clause in goods in transit insurance only applies in the event that cargo on ships or in aircraft is damaged. For such carriage, full insurance cover is also provided for war risks under our policies.

War on land is usually not covered!

The war clause contains a special right of termination for the insurer with a notice period of 2 days, in order to be able to react to changes in the situation. In the meantime, insurers have made use of their special cancellation rights across the board so that the risks of war, strike, riot as well as the seizure of national territory and territorial waters of Ukraine and in parts of Russia and Belarus are mostly no longer insured!

Re-inclusion is possible in individual cases before the start of transport with prior notification of each transport, the agreement of an additional premium and with official consent of the insurer.

This special right of termination does not apply to transport operations and storage that have already begun!

Pure damage caused by delays in travel due to the war situation is not covered by transport insurance, even under the financial loss clause, as there is an explicit exclusion for the risks of war, civil war or warlike events. However, this may be regulated differently in individual contractual cases.

Additional costs due to route changes or necessary interim storage may be liable for compensation as costs for averting damage in individual cases and only after consultation with the respective insurer. In any case, please coordinate this with the insurer and/or SUDVERS in advance!

The general statements regarding sanctions also apply to transport insurance.

Technical insurance (e.g. construction work, assembly insurance)

The general explanations regarding sanctions and risk exclusions with regard to war also apply to technical insurance.

The political risks of civil war, civil unrest and strikes are currently being cancelled by insurers in machinery insurance in Ukraine and Russia. The background to this is the (at times) blurred distinction between the individual terms civil war, civil unrest and war events

Aviation insurance

With the current sanctions, the Western world is deliberately trying to weaken the aerospace industry in Russia. This is attributable to the fact that it is not only prohibited to supply aircraft, spacecraft and parts thereof (according to CN code 88) to Russia, but that it is also prohibited to provide insurance in respect of aircraft, spacecraft and parts thereof.

This includes all product-related insurance, such as product liability insurance or transport insurance, as well as liability and hull insurance for the operation of the aircraft in Russia per se.

Group accident insurance

In conventional group accident insurance policies, insurance cover is usually only provided for employees of German companies working in Germany (in exceptional cases, also for employees working in other EU countries). In these constellations, there is thus a risk of being affected by war events on private or business trips (in Ukraine).

Standard terms and conditions only provide insurance cover for a short period (7-21 days) for accidents caused by war events, if insured persons who are abroad have been surprised by the outbreak of war there.

Extended group accident concepts (as with SUDVERS) also provide for the co-insurance of the so-called passive war risk. According to this, insurance cover exists for accidents caused by war events, under the essential conditions that

  • the insured person is not actively participating in the war;
  • the accident was not caused by NBC weapons;
  • the state in which the insured person has their domicile or habitual residence is not involved as a belligerent party and the events of war do not take place on the territory of this state; and furthermore
  • the accident is not related to a war between the countries China, Germany, France, Great Britain, Japan, Russia or USA.

Regarding these coverage requirements, please note:

  • The term “habitual residence” already applies to stays of 6 months or more (cf. Section 9 of the Fiscal Code). This means: Co-insured expatriates who have already been in Ukraine for more than 6 months no longer enjoy insurance cover under the passive war risk!
  • If there is an armed attack on a NATO country (e.g. Poland), this is considered an attack on all other NATO members in accordance with Art. 5 of the NATO Treaty, and the case of alliance is declared. In a confrontation with Russia, all major NATO powers would then automatically be at war with Russia and passive war cover would no longer apply.

The passive war risk – if also insured – usually has separate maximum indemnities and separate accumulation limits per contract, and can also be terminated by the insurer during the year with a notice period of e.g. 14 days.

However, as of today (01.03.2022), SUDVERS has not yet received any notices from insurers regarding the passive war risk.

Please contact your responsible SUDVERS specialist advisor, who will be happy to explain the specific regulations agreed for your contract.

The general explanations regarding sanctions also apply to group accident insurance.

D&O insurance

The D&O insurance does not include an exclusion for insured events due to war or warlike events. Potential insured events would, therefore, be insured, unless other coverage restrictions come into play.

The general statements regarding sanctions also apply to D&O insurance.

Cyber insurance

In cyber insurance, there are coverage exclusions for war, but with quite a different scope:

Some concepts already exclude coverage if the hacking attack is indirectly due to war. A direct connection (= with acts of war directly against insured companies) is, therefore, not a prerequisite in these contracts. This means that there would already be no insurance cover if the insurer succeeded in proving that Russia had initiated the hacker attack against the insured companies on the occasion of the Ukraine war.

Please do not hesitate to contact your competent specialist advisor regarding the specific version of the war clause agreed in your cyber contract!

The general remarks regarding sanctions also apply to cyber insurance.

Credit insurance

Credit insurers are currently adjusting limit requirements to actual utilisation, reducing or completely cancelling insurance cover for risks in Ukraine, Russia and Belarus.

It remains to be seen as to what extent this will have an impact on the continuation of limit drawings in neighbouring states such as the Baltic republics or Poland if this warlike action continues.

Stop of export guarantee cover by the Federal Government:

Since 24.02.22, the start of the Russian attack on Ukraine, the German government has suspended the so-called “Hermes Cover” for Russia and Belarus until further notice.

This measure now makes it impossible for German companies to secure so-called cover in these countries.

In combination with the measures taken by private credit insurers, this means that companies currently have no options for securing new or additional cover in the countries concerned.


Under credit insurance, bad debts are only indemnified if the delivery or service provided has not violated any sanctions imposed. It is, therefore, currently of particular importance for companies to check the current situation again before making a delivery, in order to ensure that the buyer is not now on a corresponding list.

It should also be noted that this insurance exclusion in the credit insurance sector also applies to sanctions imposed by third countries such as the USA.

As the situation is “fluid”, i.e. it can change every day, it is important for companies to closely monitor their supply chains, as this can also affect customers who are not directly located in the crisis areas.

Motor insurance

Damage caused by war events is also excluded from comprehensive motor insurance.

We, therefore, recommend that you refrain from travelling to Ukraine at present.

International health insurance

In most international health insurance policies, there is insurance cover also in countries in which there are disturbances such as riots, or even war.

However, the policy is restricted regarding illness and its consequences or for the consequences of accidents, and for cases of death that were caused by active participation in war actions and /or internal disturbances such as riots.

In individual cases there are insurers who will not provide any cover at all if the German Auswärtiges Amt [Foreign Office] had issued a travel advisory for the country in question. As a rule, this is documented in the insurance terms and conditions.

You are very welcome to consult your SUDVERS agent if you have any specific questions regarding your contract.

Important note: These explanations represent general information, in order to provide our customers with a rough source of orientation on the state of preparation. Only individual insurance contract documents and the currently applicable legal situation are legally binding.