Providing stability in an ever growing volatile world

Political Risks

What is Political Risk Insurance?

Political risk insurance provides protection against risk from political events that negatively impact investments. The risks are usually higher in the developing countries where economy or politics are unstable. Political Risk Insurance is designed for leading multinational companies, including financial institutions, exporters, investors and multilaterals.

Covers based on medium to long term projects with multiple perils covered, this insurance assists businesses in anticipating risks and assists clients prevent, anticipate, respond and ultimately recover from crisis & broader political risk exposure and events

How does it work?

Be it one off contract for purchase of good and services to long termcapital intensive investment into infrastructure, the coverage provides for a combination of protection depending upon the geography, the economic conditions, past history with the Obligor, geo-political situations and future projections.

Typical purchasers of this coverage would include Banks, Contractors, Exporters, Multinational Corporations.

Product Coverage

Currency Conversion & Transfer Restrictions

Protection against losses caused by currency transfer restrictions, interruption of scheduled payments, repatriation of capital, dividends due to currency restrictions imposed by host government. These risks are usually higher in developing countries where economy or politics are unstable.

Confiscation, Expropriation, Nationalization and Deprivation (CEND)

This cover protects organizations against the financial loss of an investment / asset due to confiscation of assets by a foreign government. Coverage may be structured to insure bank accounts, intercompany or bank loans, accounts receivable, inventory, retained earnings, supplies,WIP,ownership interest in property abroad, to cover loss resulting from government nationalization of the property or other action by the government that effectively deprives the insured of the property or restricts its operations.

Deprivation coverage insures against the risk of a government action preventing use of the asset (such as denying a permit to run a plant).

Contract Frustration due to Political events

Losses due to the non-performance of a contract caused by a private entity or the government entity. This includes inability to convert or transfer local currency into another currency or out of the country, breach or cancellation of contract by the foreign government, imposition of trade embargoes, War and other related perils.

Political Violence

Protection against physical damage to property caused by a politically motivated event such as malicious damage, war, civil war, insurrection, revolution, rebellion, strikes, riots, civil strife, sabotage or terrorism. With this product’s roots in property insurance, property damage is required for the policy to be triggered in the event of a loss. Temporary loss of use of assets, extraordinary expenses and forced abandonment too, are catered for.