Why Companies Buy Political Risk Insurance?

With increased Globalization, rapid economic growth, and modernization, emerging markets have become highly attractive locations for companies seeking to expand their businesses. Despite these great opportunities, without risk, there is no reward. Companies need to protect themselves against the potential political, financial, and reputational risks of conducting business in these emerging markets, which are characterized by unpredictable events that could threaten their overseas investments.

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 multiple consecutive policy terms, companies receive the long-term security they need at a predetermined cost.

Losses or Perils covered;

  • Breach of Contract

  • Confiscation, expropriation or nationalization

  • Repossession or re-exporting physical assets

  • Currency convertibility and non-transferability

  • 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

If your company either has or is thinking about moving physical assets or making an investment in a foreign country, you should contact our office to figure out the potential political risk in the country of consideration.

Political Risk Insurance