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Starting in 2025, Italian businesses will be required to insure their operations against catastrophic natural events such as earthquakes, floods, landslides, and overflows. This article explores the contents and implications of the new legislation introduced by the 2024 Budget Law, outlining deadlines and specific obligations for large enterprises, medium-sized businesses, and SMEs. In addition to highlighting the risks of non-compliance, it examines the challenges related to the availability of adequate insurance coverage and the opportunities provided by effective legal counsel. In a landscape shaped by climate change and economic instability, protecting one’s business is not just a legal duty but a strategic decision.
As of 2025, Italian businesses will be required to take out insurance coverage against direct material damage caused by catastrophic natural events. Earthquakes, floods, landslides, and overflows will no longer be covered solely by extraordinary State intervention: it will be up to businesses to protect their assets through a dedicated insurance policy, commonly referred to as “Cat Nat” (short for natural catastrophes).
The obligation is established under the 2024 Italian Budget Law (Article 1, paragraphs 101–111) and applies to all companies registered with the Business Register, including capital companies (S.p.A., S.r.l., S.a.p.a.), partnerships (S.n.c., S.a.s.), cooperatives, mutual insurance companies, and professional associations incorporated in corporate form. It also includes Law Firms organized as companies, provided they are registered in the relevant professional register, as well as foreign businesses with a permanent establishment in Italy.
Only two categories are exempt: agricultural businesses, which are already subject to a separate mutual insurance system, and businesses operating in unauthorized or unlawfully constructed premises, which cannot be insured under the law.
The policy must cover only direct and material damage to the assets used in the course of business. According to Implementing Italian Decree No. 18/2025, this includes buildings, facilities, machinery, and industrial or commercial equipment, i.e., tangible fixed assets listed under items B.II.1), 2), and 3) of Article 2424 of the Italian Civil Code. The obligation also extends to leased assets, if effectively employed in the production cycle.
The insurance must cover only natural and catastrophic risks: earthquakes, landslides, floods, and overflows. Indirect losses are excluded, such as loss of profits, theft, third-party damages, or harm caused by human error or intentional misconduct.
So when does the obligation come into effect, and what are the relevant deadlines for each type of enterprise?
The insurance requirement will not take effect simultaneously for all businesses. Italian Decree-Law No. 39 of March 31, 2025, sets out a phased implementation schedule based on company size, following the parameters established by EU Directive 2023/2775:
Company size must be determined by referring to the most recent approved financial statements prior to the obligation’s effective date.
It is important to note that even businesses with existing “Cat Nat” policies must verify that their coverage complies with the new legal requirements and update their contracts accordingly at the earliest opportunity.
But what happens if a business fails to comply?
The law establishes a system that involves both businesses and insurers. Companies are required to comply with the obligation, but insurance providers are also mandated to offer coverage that aligns with the legal standards.
A company that fails to obtain coverage will not be subject to a direct administrative sanction. However, the lack of an active policy results in tangible disadvantages: it may be treated as a disqualifying factor for access to public subsidies, grants, and tax benefits—even in the event of a natural disaster.
Since no explicit reference is made to retroactive applicability, it is assumed that such limitations will apply only going forward.
For small and medium-sized enterprises, this new requirement represents a complex challenge—not merely financial. Many operate with limited resources, and accessing suitable insurance coverage may prove difficult. Moreover, the willingness and capacity of insurers to offer compliant policies remain uncertain, especially in high-risk areas.
In this context, legal counsel becomes indispensable. Law firms can assist businesses in reviewing insurance offers, verifying contract compliance, identifying which assets can be effectively insured, and defending SMEs when insurers deny coverage or impose unreasonable conditions.
This regulatory shift is further complicated by the reality of climate change. Recent extreme weather events—from the floods in Emilia-Romagna to landslides in the Alps—are reshaping the concept of business risk in Italy. At this point in history, securing insurance is no longer simply a prudent choice; it is a strategic measure for survival.
