Political risks asset/investment protection
We can provide a range of insurance cover designed to protect a company's overseas assets and/or investments against the actions of foreign governments, international instability and terrorism.
Political risks insurance
Political risks insurance protects policyholders against the actions, or omission of actions, by a foreign government that:
- Deprive a corporation of all or part of its assets or financial investment located in the foreign country
- Prevent or restrict the performance of a contract
Note: Actions need to be taken by a foreign government on your overseas interests, thus creating a "cross border" risk.
Political risk policies (including contract protection) can cover a host of different things:
- Book value of foreign equity, retained earnings and accounts payable
- Book value of fixed earnings and mobile assets
- Business interruption and extra expenses
- Payments (including contractual interest) due from foreign counter parties under trade contracts, letters of credit, loan agreements or other trade-related financial instruments
- Hard currency equivalent of local currency deposits that cannot be converted or transferred
- Pre-shipment costs of raw materials, design, manufacture, overheads, up to 10% for net profit
- Scheduled payments due from a borrower under a loan agreement
Asset / investment protection
Asset and/or investment protection is tailored to guard the policyholder's assets located overseas, or the policyholder's financial investment in overseas interests.
Coverage can include the following events:
- Confiscation, expropriation and nationalisation (CEN)
- Forced abandonment
- Forced divestiture (own government actions divesting the assured of their overseas assets)
- Deprivation
- Selective discrimination (creeping expropriation)
Lenders form protection
Lenders form protection safeguards bank debt to overseas projects and is an important and growing area of CEN coverage.
Additionally, underwriters will provide coverage - either stand-alone or packaged for:
- Political violence (including strike, riot, civil commotion and malicious damage (SRCC), malicious damage and terrorism)
- Business interruption
- Contingent business interruption
Political violence cover
Either packaged with the political risks coverage or placed stand-alone political violence cover includes:
Terrorism
Strike, riot, civil commotion and malicious damage (SRCC)
War on land
This cover can be for fixed and/or mobile assets.
War on land coverage
War on land includes protection against war, civil war, rebellion, revolution and insurrection. Additionally, as from July 2002, Lloyd's has been prepared to write domestic war risks, as well as offering long-term policies.
Standard war on land policy exclusions are:
- Five powers war exclusion
- SRCC / terrorism
- Nuclear or radioactive losses
Proposal forms
- Political risks asset/ investment protection including currency inconvertability click here
- Political risks - equipment repossesion Insurance click here
- Political risks for lenders and investors - project insurance click here
- Political risks for lenders - project insurance click here
- Political Package - confiscation, expropriation, nationalisation and deprivation (C.E.N.D.)/ terrorism/ malicious damage and war on land insurance click here
- Political violence/ war on land for fixed assets insurance click here