Political Risk Insurance

Why Companies Buy Political Risk Insurance?

With increased Globalization and the rapid economic growth and modernization, emerging markets have become very attractive locations for companies looking to expand their business. Despite these great opportunities, without risk, there is no reward. Companies need to protect themselves against the potential political, financial and reputational exposures of conducting business in these emerging markets with unpredictable events that could threaten their overseas investment.

Political risk insurance can provide the protection investors, financial institutions and corporate clients need to safeguard their investments in overseas markets against unpredictable losses due to specified political risk perils. With the ability to purchase non-cancelable policies for a number of consecutive policy terms, companies receive the long-term security they need at a pre-determined cost.

Losses or Perils covered;

• Breach of Contract
• Confiscation, expropriation or nationalization
• Repossession or re-exporting physical assets
• Currency in convertibility and non-transfer
• Political violence (includes terrorism and war)
• Contract frustration due to political events
• Non-payment or Sovereign payment default
• Wrongful calling of on-demand contract guarantees and bonds

Should your company either have or are contemplating moving physical assets or making an investment in a foreign country, you should contact our office to determine the potential of political risk in the country of consideration.