Italy: The deadline for insurance against catastrophic risks for SMEs has been postponed

The insurance covers land and buildings, facilities and machinery as well as industrial and commercial equipment, used in any form (ownership, rental, loan, leasing etc.) in the business activity. Assets in currents assets, thus inventory, are excluded from the insurance coverage; as well as assets already covered by a similar insurance coverage, even when the policy is taken out by parties other than the entrepreneur employing the assets (e.g., the lessor).

The insurance policy must cover the dagames directly caused by earthquakes, floods, landslides, inundations and overflows.

In case of failure to sign the insurance policy within the deadline, the norm states that this must be considered “in the allotment of contributions, subsidies or financial benefits drawn from public resources, also considering those provided in case of catastrophic and calamitous events”. Non-compliant companies, therefore, could be excluded from public subsidies of any kind (not only those granted in case of catastrophic events) or they could access them at a reduced rate. However, penalties have been suspended for large enterprises for a transitional period of 90 days.

The stipulation of the insurance policy against physical and natural disasters is also one of the pieces of information included in the Document made by the Table for coordination on sustainable finance promoted by the Ministry of Economy and Finance called “SMEs information for Banks” which provides a summary of the information that the banking system requires in order to comply with the regulation applicable to them on ESG risk reporting and management. It is important to remember that these regulations require mandatory consideration of the company’s ESG profile for the assessment of its creditworthiness.

In addition to being a legal requirement, the undertaking of this policy is part of a broader framework of responsible business management to which all company directors are obliged, with consequential responsibilities in case of omission, along with potential negative repercussions in the access to credit.