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Compulsory liability insurance in Hungary: New obligation to be introduced | News Flash

December 21, 2023
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From January 2024, a government decree (271/2023 (29.VI.)) will enter into force, which, in line with the Waste Act, requires companies that produce waste on their premises exceeding the quantitative limits set out in the Decree to take a compulsory environmental liability insurance in Hungary or face a fine for failure to do so. 

Obligation of liability insurance in Hungary from 2024

From 2024, the insurance obligation will rise at waste producers whose premises have generated more than:

– 2000 kg of non-hazardous waste,

– 200 kg of hazardous waste

– 5000 kg of non-hazardous construction and demolition waste.

Obligation of liability insurance in Hungary from the experts’ point of view

According to the experts’ interpretation, the regulation will apply to all businesses that produce the above levels of waste, including for example restaurants, hotels and grocery stores, if the weekly amount of waste produced exceeds 38 kg, and thus the 2000 kg for the year in question.

Professionals point out that even a large household can generate about 40 kilograms of waste per week. This is the amount that a small business in Hungary can easily achieve today. Where this happens, the regulation, as currently interpreted, therefore requires environmental liability insurance to be in place.

Insurance obligation of 10 million HUF

The businesses concerned must have environmental insurance with a minimum coverage of HUF 10 million for each site concerned. Such liability insurance will, for example, help to ensure that there is sufficient cover for remediation costs, mitigation and restoration of damage caused by environmental pollution at the site concerned. It is important to note that most of the similar insurance policies previously on the market do not comply with the Gov. Decree, so businesses already insured should also review their existing policies. 

Minimum amount of compulsory insurance

The minimum amount of compulsory insurance may be higher than the minimum if the operator carries out activities subject to a waste management permit or registration obligation – in which case the minimum amount of insurance is increased (based on the Annex to the Gov.Decree) considering the degree of hazardousness of the waste.

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