Political Risk Insurance can best be described as ‘an action or inaction by Government of a host country, that hinders or frustrates a business or contract.’ One fundamental principal of this cover is that there must be a clear ‘cross border element’ to the project or risk.
Political risk is a generic heading for a wide variety of insurances, the most frequently requested being the ‘CEND’ coverages meaning: Confiscation, Expropriation, Nationalisation, and Depravation.
The key to placing Political risk cover is to fully understand the detail of the project and its inherent structure. Safeonline’s experience and expertise in this regard enables us to work closely with our clients, evaluating and understanding their individual requirements, to create the most appropriate insurance solution.
We can offer several solutions including:
Where a local “situation” deteriorates to a point that it is unsafe for the operators/ staff to remain. Employees evacuate or withdraw to a place of safety, leaving their asset unprotected.
Where an investor backs a venture overseas, but wants to protect the financial investment alone and not the personnel or physical structures.
Non-repossession of aircraft: where a provider of lease financing on an aircraft wishes to protect the potential of the lessee defaulting on the loan. This default can result in the aircraft being unable to be repossessed, deregistered and resold in the currency of outstanding debt.
To protect against government sponsored acts, including:
- Unilateral termination of a contract by a foreign government;
- Cancellation or revocation of (import and/or export) licences;
- Non-delivery for pre-paid goods; non-payment;
- Inability to convert and/or transfer foreign currency;
- Non-honouring of payment instruments such as, central bank guarantees or letters of credit;
- Refusal to pay arbitration awards;
- Wrongful calling of contractual bonds.