Mandatory Civil Liability of Hazardous Production Facility Owners

Federal Law 'On Mandatory Civil Liability Insurance of Hazardous Facilities Owners for Causing Harm as a Result of Accident at Hazardous Facility' regulates relations referring to Mandatory Liability Insurance of Hazardous Production Facilities Owners (a legal entity or an individual entrepreneur in possession of a hazardous facility on the basis of ownership, or on other legal grounds and operating the hazardous facility) for causing damage and protecting victims (both, employees of third parties and employees of the policyholder) as a result of accident at hazardous facility in the territory of the Russian Federation.

Insurance of Hazardous Facilities

Mandatory Civil Liability Insurance of Hazardous Production Facility Owners Federal Law No. 225-FZ applies to:

Civil Liability Insurance of Hazardous Production Facilities (incl. 225-FZ and 116-FZ), where:

Hazardous substances are produced, used, processed, formed, stored, transported, destroyed, which are: a) flammable; b) oxidizing; c) combustible; d) explosive; e) toxic; e) highly toxic; g) hazardous to the environment
Equipment operating under overpressure of more than 0.07 MPa is used with: a) steam, gas; b) water at a heating temperature of more than 115 C; c) other liquids, at a temperature exceeding their boiling point at an overpressure of 0.07 MPa
Permanently installed lifting mechanisms are used (with the exception of elevators, lifting platforms for the disabled), escalators in subways, cable cars, funiculars
Melts of ferrous and non-ferrous metals and alloys based on these melts are produced, transported and utilized using the equipment designed for a maximum amount of 500 kilograms of melt or more
Mining operations are conducted (with the exception of common minerals extraction and mineral alluvial deposits development carried out by an open method without the use of blasting), works on the minerals enrichment
Storage or processing of plant materials is carried out, during which explosive dust-air mixtures are formed capable of independent ignition, combustion from an ignition source, and burning after its removal, as well as storage of grain, products of its processing and feed raw materials that are prone to self-heating and spontaneous self-ignition

At the same time, on the basis of 225-FZ: Hazardous production facilities, depending on the level of potential danger of accidents at them for the vital interests of the individual and society are divided into four hazard classes:

Hazard class I - hazardous production facilities of extremely high danger
Hazard class II - hazardous production facilities of high hazard
Hazard class III - hazardous production facilities of medium hazard
Hazard class IV - hazardous production facilities of low hazard

Until 01.01.2014 all hazardous production facilities are required to re-register with Rostekhnadzor.

Insurance of elevators, lifting platforms for the disabled, escalators (excluding escalators in subways)

Hazardous production facilities do not include power grid facilities
Hazardous facilities do not include facilities located within the boundaries of nuclear facilities

Insurance of hydraulic structures (HTS)

Dams, hydroelectric power station buildings, spillway, water outlet and drainage structures, tunnels, canals, pumping stations, shipping locks, ship lifts, structures designed to protect against floods and destruction of reservoir banks, banks and bottom of riverbeds, structures (dams) that enclose storage of liquid waste from industrial and agricultural organizations, erosion control devices at canals and other facilities designed to use water resources and prevent the negative impact of water and liquid waste.

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FAQ

What are the exclusions from the coverage?

The main exclusions from the coverage are: violation of competition; deliberate actions; claims already known or declared earlier (under other policies) as of the inception date of the insurance period and/or circumstances that may lead to them; damage to property, health and / or life, since these risks are covered by general liability insurance policies. However, depending on the specific risk and the insurer’s underwriting policy, damage to property, health and / or life that occurred due to a breach of duty may be exempt from this exclusion; liability under the contract (with the exception of such liability, which would normally arise in the contract’s absence); environmental pollution (often defense costs can be deducted from this exclusion).

How are insurance payments calculated for this type of insurance?

Payments under this type of insurance are limited to the sum insured or the limit of the Insurer’s liability, which is usually cumulative for all insured events during the insurance period.

What insurance period is covered by insurance?

Insurance usually does not cover claims for actions taken before the start of the insurance period. Most common policy period – 12 months.