Industrial Risk Insurance

Risk placement and loss settlement in a new reality

Rapid legal audit of insurance contracts and support in re-placing risks for industrial and agricultural holdings, ports, grain elevators and logistics hubs.

Alexey Borodak, Ivan Rybakov

In the team’s portfolio

Successful pre-trial and court settlements

Major infrastructure fires

Complex marine disputes

Losses from drone strikes

RNRC Concept

The market after the RNRC Concept

The Russian National Reinsurance Company’s concept for reinsuring terrorism, sabotage and drone risks has moved the market to strict standardisation. International placement standards run into restrictions — both when structuring cover and when settling losses.

up to RUB 50 bnno more than one aggregate limit per group or single site

Three hidden problems

What changes for an industrial group

The “proportional trap”

New contracts at the same site, including third parties’ contracts within the same production and logistics hub, cut the limits of all covers. Concentration of inventory at ports, elevators and rail hubs leads to underinsurance.

BI carved out

Business interruption losses and loss of rental income are fully excluded from subsidised reinsurance.

Penalty tariff package

Any drone or sabotage incident since 2022 moves the risk from the preferential package No. 6 to the basic package No. 2: higher rate, deductible and insurer’s retention.

Our approach to placement

We overcome the limit barriers of the new Concept

Direct contact with top underwriters and knowledge of how the RNRC works inside let us apply best market practice and overcome the limit barriers of the new Concept.

Tools

Special RNRC acceptances: we form the risk pool correctly
Protection of cumulative sites: combined first-loss programmes
BI compensation: alternative capacity

Case law

Four non-obvious trends

Based on the practice of the Russian Supreme Court, including Plenum Resolution No. 19 of 25 June 2024.

Trend

Qualifying drone attacks (Art. 964 of the Civil Code)

The risk

Insurers treat incidents as “military action”. Secondary damage from fire or water, a drone falling due to electronic warfare without detonation, air defence debris are taken out of cover

Solution

Pre-emptive tailoring of policy wording for each scenario

Trend

The “Nevskaya Manufaktura” paradox (Art. 963 of the Civil Code)

The risk

If management knew about orders or defects but did not budget for remedying them, a refusal to pay is lawful

Solution

Audit of technical correspondence before the contract is concluded

Trend

“Paper tigers”

The risk

Declaratory clauses are invalid, but insurers delay payment by requesting excessive expert reports

Solution

We block such demands at the pre-trial stage

Trend

VAT trend reversal (Antipinsky refinery case)

The risk

Courts examine the right to a deduction and move away from including VAT in the payout

Solution

We fix the damage calculation method in the policy

Three steps

How we run the audit

1
Step 1
Analysis of policy vulnerability to the new RNRC limit scale and a placement architecture without the “proportional trap”
2
Step 2
Checking the wording for the risk of an allegation of “wilful inaction”
3
Step 3
Financial and legal mechanisms to compensate for lost capacity

Project team

Who leads the project

Alexey Borodak

Partner, Head of Dispute Resolution

Represents clients before Russian arbitrazh (commercial) courts, courts of general jurisdiction and in international arbitration. Before joining Horizon Global he practised for almost 15 years at the Moscow office of Norton Rose Fulbright and worked at international and leading Russian disputes firms, including Magic Circle firms.

Specialises in insurance and loss recovery: involved in 100+ insurance disputes, led the litigation function of Ingosstrakh and served for many years on the Insurance Committee of the Association of European Businesses (AEB).

a.borodak@horizon-global.eu Profile

Ivan Rybakov

Counsel

For more than 20 years headed the general legal practice of Ingosstrakh. Handled the settlement of the largest losses, including payouts under limits exceeding RUB 10 bn.

Served on the specialist committees of the All-Russian Insurance Association and the National Union of Insurance Companies. Knows the insurance market from the inside: how an insurer decides on a loss and where the line of a dispute lies.

i.rybakov@horizon-global.eu Profile

Risk placement and loss settlement in a new reality

Successful pre-trial and court settlements

Major infrastructure fires

Complex marine disputes

Losses from drone strikes

The market after the RNRC Concept

What changes for an industrial group

The “proportional trap”

BI carved out

Penalty tariff package

We overcome the limit barriers of the new Concept

Four non-obvious trends

How we run the audit

Who leads the project

Alexey Borodak

Ivan Rybakov

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