Compulsory civil liability insurance for owners of hazardous facilities (OSOPO, from the Russian abbreviation) has been in force in Russia since 1 January 2012. It is based on Federal Law No. 225-FZ of 27 July 2010 "On Compulsory Insurance of the Civil Liability of a Hazardous Facility Owner for Harm Caused by an Accident at a Hazardous Facility". The idea is simple: if an accident happens at a facility and people or third-party property are harmed, compensation within the statutory limits is paid by an insurance company, not only by the owner.
Below is the essential information for owners of industrial sites, shopping centres, residential buildings with elevators and petrol stations.
Who must buy cover
The policyholder under OSOPO is the owner of a hazardous facility: a company or an individual entrepreneur that holds the facility by right of ownership, economic management, operational management or another legal basis (for example, a lease) and operates it. The obligation rests with whoever actually operates the facility, so under a lease it should be allocated in the contract in advance.
Which facilities are covered by the law
- hazardous production facilities subject to registration in the state register under Federal Law No. 116-FZ "On Industrial Safety of Hazardous Production Facilities";
- hydraulic structures entered in the Russian Register of Hydraulic Structures;
- petrol stations selling liquid motor fuel;
- elevators, wheelchair lifts, passenger conveyors (moving walkways) and escalators, except escalators in metro systems.
In practice, OSOPO is not only about heavy industry. A policy is needed by property management companies and homeowners' associations operating elevators, owners of shopping and business centres with escalators, petrol station chains, boiler houses, warehouses with hazardous substances and many others.
What counts as an insured event
The insured event is the owner's civil liability for obligations arising from harm caused to victims by an accident at the hazardous facility during the policy period. Victims may be individuals, including the policyholder's own employees, and organisations whose property was damaged.
Sums insured and payout limits
The sum insured depends on the type of facility and the maximum possible number of victims. Article 6 of Law 225-FZ sets it between RUB 15 million and RUB 9.75 billion (for facilities with a mandatory safety declaration where the maximum possible number of victims exceeds 3,000); for lifts, escalators and other facilities without a safety declaration, except those named separately in the law, it is RUB 20 million.
The payout to a single victim is capped as follows:
| Type of harm | Payout |
|---|---|
| Death of a victim (to persons entitled to compensation) | RUB 3,000,000 plus up to RUB 40,000 for funeral expenses |
| Harm to health | up to RUB 3,000,000 |
| Disruption of living conditions | up to RUB 300,000 |
| Damage to an individual's property | up to RUB 750,000 |
| Damage to an organisation's property | up to RUB 1,000,000 |
Lost profit and moral damage are not compensated under OSOPO, and the law provides no payouts for environmental damage. If the actual loss exceeds the limits, victims may claim the difference from the facility owner. That is why many companies add voluntary general liability insurance on top of the compulsory policy.
How the contract is concluded
An OSOPO contract is concluded for at least one year. Only insurers holding a Bank of Russia licence for OSOPO and belonging to the professional association of insurers — the National Union of Liability Insurers (NSSO) — may write this cover.
Premium rates, their structure and how they are applied are set by the Bank of Russia. The final premium depends on the type of facility, its sum insured and adjustment coefficients. Before concluding the contract, the insurer has the right to inspect the facility.
The paperwork usually includes an application, details of the owner, documents for the facility and the data used to set the sum insured: the registration number of the hazardous production facility in the state register, specifications of elevators or escalators, and an estimate of the maximum possible number of victims. The exact list depends on the facility type and the insurer.
Penalties for operating without a policy
Operating a hazardous facility without an OSOPO contract is an administrative offence under Article 9.19 of the Russian Code of Administrative Offences. The fine is RUB 15,000 to 20,000 for officials and RUB 300,000 to 500,000 for legal entities. In addition, if an accident happens without a policy, the owner compensates all harm to victims out of its own funds.
What to do after an accident
- Ensure people's safety and call the emergency services.
- Notify the insurance company as soon as possible.
- Keep and collect documents on the accident and its consequences — the insurer and the victims will ask for them.
- Help victims file their claims: the claim for payment is submitted to the insurer by the victims themselves or their representatives.
How Polis Re can help
Polis Re specialists help owners of hazardous facilities work out which facilities are subject to OSOPO, gather the data needed for a quote and request offers from insurance companies. Learn more about this type of cover on the OSOPO page, and see other programmes for companies in the Business insurance section. You can send a request using the quote form.
Reviews of other legislation are available in the Laws section.