Political Risk Insurance
What is Political Risk Insurance?
In any industry, domestic or international, political decisions and events can negatively impact businesses.
Political risk insurance protects the policyholder against financial losses arising from political events. These events include war, political decisions, political bans and regulation changes.
Political risks can cause a business to suffer significant financial losses, loss of clients, increased expenses, and more.
What Does Political Risk Insurance Cover?
Political risk insurance cover includes:
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Terrorism or war
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Currency fluctuations
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Sudden bans imposed by a country
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Changes in customs and tariffs, including unexpected shifts in import/export regulations
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Expropriation, which involves the government confiscating money, property, or businesses
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Changes in laws, including tax regulations
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Nationalisation
Political Risk Insurance Tips
Without political risk insurance, many businesses would be reluctant to expand into developing countries. Working with companies worldwide can be risky, and political risk insurance provides a safety net if issues arise due to the government.