What is Political Risk Insurance?

political risk insurance

In any industry, domestic or international, political decisions and situations can have a negative impact on businesses.

Political risk insurance protects the policyholder against the threat of financial loss caused by political events.  These events can include war, political decisions, political bans and regulation changes.

Political risks can cause a  business to suffer a significant financial loss, loss of clients, increase of expense and more.

What is covered?

The  political risk insurance cover includes:

  • Terrorism or war
  • Currency Change
  • Sudden country bans
  • Customs and tariffs – an unexpected change in import/export rules
  • Expropriation – confiscation of money, property or a business by a government
  • Change in laws ( including tax laws)
  • Nationalisation

What should you know?

Without political risk insurance, many businesses would be reluctant to spread their business to developing countries. Working with companies worldwide can be risky, and political risk insurance provides a safety net if things go wrong due to the government.

Now, more manufacturing, engineering, and construction companies are buying this cover for their operations in the Middle East and African countries. However, it is an important insurance for any business selling or buying products from different countries.



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