Insurance and prevention: the new rules for Italian companies in 2024.

With the entry into force of the 2024 Budget Law, starting from 31 December 2023, Italian companies will be required to comply with a new legislative obligation: the stipulation of an insurance policy against damage resulting from natural disasters.

This provision aims to strengthen the resilience of the national entrepreneurial fabric in the face of unpredictable and potentially devastating events.

Companies operating within the national territory will have until 31 December 2024 to stipulate insurance contracts to comply with these new directives.

Details of the insurance obligation.

The policies in question must cover damage to tangible fixed assets caused by a wide range of catastrophic events, including earthquakes, floods, volcanic eruptions, landslides and floods. Insurance will become a prerequisite for business operations and for access to forms of public financial support.

Consequences of non-compliance.

Companies that do not comply with this legislation, will be subject to financial penalties ranging from 200 thousand to one million euros. This aspect underlines the seriousness with which legislators intend to pursue the protection of economic activities from the risk of disasters.

Financial support and coverage of SACE S.p.A.

To facilitate compliance with this new provision, financial support will be provided: SACE S.p.A. will undertake to cover up to 50% of compensation for insured damages, with a maximum ceiling of 5,000 million euros distributed between 2024 and 2026.

Does investing in security reduce costs?

Although the insurance obligation is separate from seismic improvement measures adopted, it is important to note that companies that invest in seismic retrofitting could benefit from more advantageous insurance premium. Insurance companies tend to positively evaluate preventive actions and structural improvements that reduce the risk of damage. Therefore, a company with a high seismic safety standard could negotiate more favourable insurance conditions, reflecting the lower risk in terms of lower premiums and reduced deductibles.

Towards a culture of prevention.

The introduction of compulsory insurance, represents an important step towards promoting a culture of prevention within the Italian business landscape. Businesses are urged not to underestimate the importance of this measure and to start exploring the insurance options available at this time to ensure continuity of their activities in the event of adverse events. At the same time, it is advisable to evaluate seismic improvement interventions as a strategic investment that can lead to long-term insurance costs savings.