Compulsory liability insurance of hazardous facility owner or operator

Liability insurance of owner or operator of a hazardous waste treatment, storage, or disposal facility or group of facilities is regulated at the state level. By-laws, standards and regulations applicable to owners and operators of hazardous waste treatment, storage, and disposal facilities are:

Federal Law No. 225-FZ “On compulsory general and employers’ liability insurance of an owner of a hazardous facility for damages in case of an accident involving such hazardous facility” dd. July 27, 2010

Bank of Russia Ordinance No. 4234-U “On insurance tariffs and their structure, including maximum charges used to finance compensations, on the procedure for insurers to apply insurance tariffs to calculate an insurance premium under a contract for the compulsory third party liability insurance of the owner of a hazardous facility for inflicting damage as a result of an accident at such hazardous facility” dd. December 19, 2016

Bank of Russia Regulation No. 574-P “On the rules of compulsory third party liability insurance of the owner of a hazardous facility against the damage resulting from an accident at such facility” dd. December 28, 2016

Hazardous facilities

Hazardous facilities whose owners or operators are obliged to have and maintain compulsory insurance include those located within the Russian Federation and other territories under jurisdiction of the Russian Federation in accordance with the Russian Federation legislation and norms of international law, namely:

1) hazardous production facilities which are subject to registration in the state register of hazardous production facilities in accordance with the legislation of the Russian Federation about industrial safety of hazardous production facilities

a) where hazardous substances (flammable, oxidizing, combustible, explosive, toxic, highly toxic, and environmentally hazardous) are generated, used, processed, formed, stored, transported, or destroyed, including LPG (liquefied petroleum gas) and (or) liquid fuel refueling sites;

b) where equipment operates under pressure ≥ 0.07 MPa or a water heating temperature ≥ 115 degrees Celsius;

c) where permanently installed lifting devices, escalators (including elevators and escalators in apartment buildings, retail facilities, public catering facilities, office buildings and other objects intended for people's vital needs), cableways, or funiculars are used;

d) where molten iron, ferrous and non-ferrous metals and alloys based on these metals are produced;

e) where mining, mineral processing, and underground work is carried out;

2) hydraulic engineering constructions which are subject to entering into the Russian register of hydraulic engineering constructions in accordance with the legislation of the Russian Federation on the safety of hydraulic engineering constructions;

3) liquid fuel (petrol) stations;

4) elevators / stairlifts and platform lifts for disabled people / escalators (except for metro escalators), or passenger conveyors (moving walkways).

Key documents for insurance policy

1. Pursuant to paragraph 1.3. of the Rules of compulsory third party liability insurance of the owner of a hazardous facility against the damage resulting from an accident at such facility (Bank of Russia Regulation No. 574-P dd. December 28, 2016), hereinafter, the Rules, documents required for mandatory liability insurance policy are:

1.1. If compulsory liability insurance is taken out by an owner or operator of a hazardous production facility:

1) filled out compulsory insurance proposal, in the form in Appendix No. 2 to the Rules, together with the duly completed documents, in the forms approved by the insurer ^[1], containing information required to determine the harm, maximum possible number of injured people and safety level of a dangerous facility (hereinafter, the Forms);

2) copy of the certificate of registration in the state register of hazardous production facilities (hereinafter, the State Register);

3) copies of the proof of ownership and (or) title of a hazardous production facility (such as certificate of title, lease agreement, balance sheet extract or other documents), at the insurer's request;

4) copy of an accounting card of a hazardous production facility approved by Rostechnadzor (Russian inspectorate of ecological, technical and atomic supervision) ^[2], and copy of a document containing the data characterizing hazardous facility prepared in accordance with industrial safety regulations;

5) loss history (if a policyholder renews a policy with another insurer).

If compulsory insurance is taken out prior to registration of a hazardous facility, the policyholder will, in addition to the completed insurance proposal form, submit to the insurer copy of a document which contains characteristics of a hazardous facility and which is prepared in accordance with the requirements of industrial safety regulations. The policyholder will be required to submit to the insurer, no later than three working days after the registration of a hazardous facility, the remaining required documents (para. 1.1. above) together with an issued policy in which the insurer will add the registration number of a hazardous facility and endorse a policy with signature and stamp.

1.2. If compulsory liability insurance is taken out by an owner or operator of a hazardous hydraulic facility:

1) filled out compulsory insurance proposal, in the form in Appendix No. 3 to the Rules, together with the duly completed Forms approved by the insurer;

2) copy of the extract from the Russian register of hydraulic engineering constructions;

3) copies of the proof of ownership and (or) title of a hazardous facility (such as certificate of title, lease agreement, balance sheet extract or other documents), at the insurer's request;

4) loss history (if a policyholder renews a policy with another insurer).

1.3. If compulsory liability insurance is taken out by an owner or operator of a petrol station:

1) filled out compulsory insurance proposal, in the form in Appendix No. 4 to the Rules, together with the duly completed Forms approved by the insurer;

2) copies of the proof of ownership and (or) title of a hazardous facility (such as certificate of title, lease agreement, balance sheet extract or other documents);

3) loss history (if a policyholder renews a policy with another insurer).

1.4. If compulsory liability insurance is taken out by an owner or operator of elevators / stairlifts and platform lifts for disabled people / escalators (except for metro escalators), or passenger conveyors (moving walkways):

1) filled out compulsory insurance proposal, in the form in Appendix No. 4 to the Rules, together with the duly completed Forms approved by the insurer;

2) copies of the proof of ownership and (or) title of a hazardous facility (such as certificate of title, lease agreement, balance sheet extract, charter of a housing cooperative, real estate management agreement with a schedule of properties, or other documents);

3) loss history (if a policyholder renews a policy with another insurer);

4) elevator insurance questionnaire (if elevator coverage is required).

^[1] To view the Forms, visit https://www.nsso.ru/policyholders/opo/sample_doc/.

^[2]Not required for hazardous production facilities registered in the State Register after February 14, 2017, pursuant to Rostechnadzor Order No. 494 “On approval of the administrative regulations for the provision by the Federal service for ecological, technical and atomic supervision of the public service for registration of hazardous production facilities in the State Register of hazardous production facilities” dd. November 25, 2016.

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