Political Risk Insurance

Political Risk Insurance

With deep experience in political risk insurance, Credit Eureka is one of the most skilled agencies in the world for companies, banks, and investors who need this product. We’ve helped companies with government contracts in diverse places – from Malawi to Uzbekistan – and a variety of industries.  Some examples include the fiber optic cable circling the globe, consumer product sales in the Middle East, gas pipelines across Eastern Europe, and aviation fees in Asia securitizing traded debt.

What is Political Risk Insurance?

Political risk insurance helps companies, financial institutions, and investors protect their overseas contracts, their plants, equity, branch capital, and other forms of investment from losses caused by local government default, regulatory impairment, seizure, embargo, a civil strike, a riot, or other form of political violence.  Coverage is available in over 150 countries around the world.  Recent examples of political risk events where insurers have paid claims to companies include: Losses on operations in Ukraine; nationalisation of oil facilities in Latin America; payment defaults by government owned banks; and damages sustained in Egypt during the Arab Spring.

Who buys Political Risk Insurance?

Manufacturers, Commodity, Infrastructure Project Sponsors, Contractors, Banks, Telecommunication, Technology, Telecommunication, Aviation, and other Transportation-related companies

  • Companies who are awarded large contracts with foreign governments
  • Companies with long term assets and capital investments overseas
  • Companies with overseas operations in special economic zones
  • Companies who have or want to issue debt for property, a plant, a fab, inventory, or equipment in a foreign country
  • Companies with fleets of mobile assets in & out of foreign countries, such as shipping, aviation, and energy companies
  • Commercial banks extending credit to government owned banks
  • Investment banks enhancing the rating on Client debt backed by foreign cashflows or security located in foreign country
  • Companies & banks with large amounts of capital on deposit in a foreign country

What risks are covered? Primary examples are:

  • Nonpayment by foreign governments
  • Seizure or confiscation of company’s property or capital by host government
  • Destruction / losses due to political violence or civil commotion within host country
  • Failure to honor guarantees made by a host government
  • False calling of your company’s posted bonds by a host government
  • Calling of bonds or guarantees due to strikes, riots, war, or insurrection in host country
  • Foreign currency inconvertibility

How much does Political Risk Insurance cost?

  • Contact Us for Insurer Rates. Premiums typically are a factor of:
    • A per annum rate X $ amount of insurance a company requests.

How long does it take to put a program in place?

From insurer receipt of completed application / insurance request:

  • 1 – 2 weeks for a single project/transaction in a single country
  • 2 – 4 weeks for risks involving multiple countries.