Contractual protection
Contractual protection insurance protects policyholders against the actions, or omission of actions, by a foreign government that:
- Deprive a company of all or part of its assets or financial investment located in the foreign country/detailed in a contract, or
- Prevent or restrict the performance of a contract
Besides the benefits of protection on a specific risk, contractual protection insurance can bring the additional advantages of preferential banking costs, enhanced lending and investment opportunities and peace of mind for shareholders.
Specific instances where contractual protection insurance provides invaluable cover for cross-border risks include:
- Unfair calling of bonds lodged with the foreign government as security to an oil supply contract
- Non-payment by a foreign government utility for goods or services under a supply contract
- License cancellation by a foreign government, causing loss of anticipated revenue
Coverage includes:
- Repudiation of contract by foreign government, when acting as the buyer or the supplier
- Frustration of a contract for other reasons, such as war or foreign government embargo
- Cancellation of licenses
- Currency inconvertibility and exchange transfer problems
Proposal forms
- Contract frustration (non-delivery) insurance, click here
- Contract frustration (non-payment) insurance, click here
- Political risks asset / investment protection including currency inconvertibility insurance, click here
- Political risks - equipment repossession insurance, click here
- Political risks for lenders and investors - project insurance, click here
- Political risks for lenders - project insurance, click here