As the situation in Ukraine intensifies, with mainstream media in the UK reporting that Russia is making serious preparations for an invasion, it’s important that businesses assess their current risk exposures, according to Hamish Greenwood, Partner at global insurance broker, McGill and Partners.
Despite situating some 100,000 soldiers on Ukraine’s borders, Russia states that it has no intention of invading Ukraine over the country’s desire to join NATO.
Regardless of whether Russia is in fact going to invade or is simply flexing its muscles, tensions are rising and so far, more than a dozen countries have called on their citizens to leave Ukraine, warning of an “imminent” invasion.
But as Russia seeks assurances that Ukraine will never be allowed to join NATO – something alliance members have opposed – the situation remains both tense and uncertain; with the world waiting to see what Russia’s President, Vladimir Putin, does next.
Commenting on the possibility of an invasion of Ukraine, McGill’s Greenwood said: “The political tensions in Ukraine and a potential invasion could have significant repercussions on people’s lives and how they access basic services like public transport, retail and healthcare.
“As the situation continues to escalate businesses will be assessing their current risk exposure and making plans. This could include understanding the risk to physical assets, as well as potential disruption to operations.”
Additionally, Greenwood has urged businesses to assess their cyber exposure at this time, given the recent cyber-attacks and warnings from the United States that any Russian invasion could follow significant attacks.
“The cost of these risks collectively could be substantial for many businesses, and may leave some unable to operate for days, weeks or even months,” he continued.
Adding, “Insurance policies can cover disruption due to conflict or cyber-attacks and business owners should check with their insurance providers if this cover is included.
“When purchasing insurance for political violence events, decision-makers should be aware that different policies offer different coverage extensions, from crisis management to business interruption and cyber cover, and this could make a real difference from an operational and financial perspective.”
With fears that Russia could invade any day now mounting, it’s been reported that leaders from across the EU are considering holding a summit on Ukraine this week.
In spite of the mass of troops on its borders, the country is still eager to become a member of NATO, with Ambassador Vadym Prystaiko telling Sky News recently that more than half of Ukrainians believe that the only way to ensure the country’s security is to join NATO.
As we wrote earlier, the Ukrainian Government has launched a USD 592 million fund to guarantee the continuation of flights through the region’s airspace. The fund comes as insurers started to pull cover, prompting airlines to stop flights into the country and through its airspace.