Political Risks Insurance

Political Risk Insurance: Safeguard Your International Investments and Contracts

Operating in international markets may come with unusual challenges, including potential political risks. Political risk insurance helps businesses protect their overseas assets and investments from unpredictable political situations, including the impact of foreign government policies and actions, such as:

Confiscation of Assets

Exporters, investors, and businesses looking to protect their assets such as equipment, inventory, or property in foreign countries against risks like confiscation, expropriation, and nationalization can find all they need with “Political Risks Insurance.” In cases where the political turmoil or discriminatory regulations may result in the loss of ownership of your assets, forced abandonment, business interruptions, and “creeping expropriation” — gradual deterioration of ownership rights through inappropriate government actions, you can seek support under your policy. We may also cover cases where foreign governments block your business from transferring dividends, royalties, or other payments to your home country.

Currency Inconvertibility and Transfer Restrictions

Two major currency-related foreign trade risks can be covered under Political Risks Insurance (PRI): the inability to convert your local currency into a globally accepted currency and constraints on transferring funds to your country from a foreign country. These risks may arise from political issues like economic crises, government-imposed trade controls, or other political decisions. The insurance provides coverage for your revenue streams and assets, including local currency dividends, debt refunds, and trade incomes, safeguarding your capital against politically driven foreign exchange or transfer restrictions.

Political Violence

Our insurance covers financial loss to your business due to politically motivated violence events such as wars, protests, civil unrest, domestic terrorism, and sabotage. This ensures protection against financial losses, including unpaid services, business interruptions, loss of principle, or destruction of physical assets caused by these events.

Contract Repudiation

This insurance protects you from unexpected contract cancellation when engaging with foreign dealers, governments or public-sector companies. Contract repudiation insurance, or contract frustration insurance, protects an insured entity against the possibility of its foreign partners failing to honor contractual obligations for any reason. The coverage also applies to private-sector customers or business entities in politically unstable regions, including subsidiaries or affiliates of public agencies.

License Cancellation

Businesses that rely heavily on import/export activities may be vulnerable to government-imposed restrictions like license cancellations, embargoes, sanctions, or trade boycotts. The Political Risks Insurance covers financial losses incurred by your business due to government actions or impositions, including suspension of business operations and non-payment of outstanding dues.

Wrongful Calling of Guarantees

Companies exporting goods internationally often provide guarantees or letters of credit when creating contracts with foreign governments or public-sector entities. The insurance covers protection against the unfair calling or extension of such guarantees, safeguarding your business from financial losses arising from unexpected political actions.

Failure to Deliver by Foreign Suppliers

For businesses dealing with foreign exporters on pre-paid or cash-in-advance terms in high-risk regions, non-delivery of imports on time can result in significant financial losses. The insurance covers losses incurred from non-delivery due to political events, government interruptions, government confiscation of goods, or any other reason beyond the supplier’s control, ensuring financial compensation for undelivered products.

AtoZWoodCompany provides comprehensive Political risk insurance to safeguard your export business from political and other foreign government-oriented risks beyond your control. By covering financial losses arising out of political instability and government actions, this insurance helps secure your assets, and investments, ensuring business continuity in even the most challenging circumstances.