Ukraine Approves State Compensation of Up to 80% for War Damage to Vessels

Ukraine approved a state compensation package for vessels damaged by Russian military attacks in the Black Sea, intended to cover losses not fully covered by the vessels' insurance.

The mechanism was announced by the Ministry of Communities and Territories Development on October 16, 2026, and provides for state compensation of up to 80% of eligible losses on seagoing and inland navigation vessels, in cases where the relevant risks are not covered by insurance.

Coverage extends to Ukrainian territorial waters, the temporary maritime corridor connecting the ports of Odesa, Chornomorsk and Pivdennyi with Romania's territorial waters and exclusive economic zone, and the rest of the Ukrainian ports open to traffic. To access the assistance, vessels must hold insurance or a protection and indemnity (P&I) policy in force at the time of the incident, and applications may be filed by owners, operators and charterers of vessels flying the Ukrainian flag as well as foreign flags.

Compensable damages include the loss or damage of the vessel and its cargo, the costs of emergency and rescue operations, and losses suffered by the crew. Compensation is granted as a non-repayable grant and must be requested within 180 calendar days after the incident, subject to the availability of budget funds; compensation for damage occurring in 2026 will be financed from the 2027 budget.

Ukraine's Minister of Transport, Mykola Kalashnyk, stated that Russia continues to deliberately target the country's ports and civilian shipping in order to disrupt export routes, and that elevated war risks combined with insufficient insurance coverage are affecting shipowners' decisions on calling at Ukrainian ports. Ukraine had already established a similar guarantee procedure in 2023 to compensate owners, operators and charterers for damage resulting from Russian aggression.