[Korea Federation of SMEs]
[Korea Federation of SMEs]

DB Insurance contributes 500 million won to fund small business support

Korea Federation of SMEs to recruit, select beneficiaries; ministry to set guidelines

Move aims to ease costs for firms required to carry environmental liability coverage

Small and medium-sized enterprises required to carry environmental liability insurance will receive up to 50 percent of their premium costs if selected as beneficiaries under a new support project. DB Insurance will contribute 500 million won ($365,000) to fund the initiative, while the Korea Federation of SMEs will select recipients, focusing on smaller, less-resourced businesses.

The Korea Federation of SMEs announced Wednesday that it will sign a memorandum of understanding with the Ministry of Climate, Environment and Energy and DB Insurance on Thursday at its Yeouido headquarters in Seoul to launch the Environmental Liability Insurance Premium Support Project for SMEs. The program is designed to reduce the financial burden that mandatory environmental liability insurance places on small businesses, with selected firms eligible to receive up to 50 percent of their premiums.

Environmental liability insurance covers costs related to compensating victims and restoring contaminated sites in the event of an environmental pollution incident. Under the current Act on Liability for Environmental Damage and Relief Therefor, businesses that operate facilities with a high risk of environmental pollution — including those that discharge specific hazardous air or water pollutants and designated waste treatment facilities — are required to carry the insurance.

The Ministry of Climate, Environment and Energy reviewed the support project and developed its detailed guidelines. The Korea Federation of SMEs plans to accept applications primarily from smaller, financially constrained businesses in need of premium assistance and will select the final beneficiaries.

DB Insurance, the lead insurer for the fourth term of the environmental liability insurance program, will contribute 500 million won to the federation's joint project fund. The three organizations plan to continue cooperating to raise environmental and safety management standards among small and medium-sized enterprises following the agreement signing.

Yang Chan-hoe, executive managing director of the Korea Federation of SMEs, said he hopes that easing the cost burden of environmental risk management will lead to greater investment in environmental facilities and more sophisticated management systems, creating a virtuous cycle that supports sustainable business conditions for small firms. "We will actively cooperate with the Ministry of Climate, Environment and Energy to advance a variety of support projects that small businesses on the ground actually need," he added.


hong@heraldcorp.com