Why you need Political Risk Insurance

Investing in or exporting to emerging markets presents great opportunities to grow your business, but can expose your company to political risks.

Choose the political risks that you want to cover. Here are the types of risks you can protect yourself against.

Creeping or outright expropriation

For no apparent reason or with no justification, foreign governments can seize, confiscate or otherwise expropriate your investment. They can even adopt a series of measures that have the effect of expropriation. In either case, the result is that you could lose your overseas investment or asset.

Political violence

Political terrorism, war, civil strife or other forms of political violence can damage or destroy your assets and prevent you from conducting operations essential to your business.

Conversion

During an economic crisis, foreign governments or central banks may decide to impose restrictions or prohibitions on the conversion of the local currency to hard currency.

Transfer

In times of crisis, foreign governments or their central bank may prevent hard currency from leaving the country.

Repossession

If a foreign government prevents you from repossessing or re-exporting physical assets brought into the country (e.g. machinery, equipment, rolling stock, an aircraft, etc.), then you would be faced with repossession risk.

Non-payment by a government

Foreign governments may refuse or be unable to make scheduled loan payments or honour a financial guarantee, exposing you to non-payment risk.

Transfer

In times of crisis, foreign governments or their central bank may prevent hard currency from leaving the country.

Repossession

If a foreign government prevents you from repossessing or re-exporting physical assets brought into the country (e.g. machinery, equipment, rolling stock, an aircraft, etc.), then you would be faced with repossession risk.

Non-payment by a government

Foreign governments may refuse or be unable to make scheduled loan payments or honour a financial guarantee, exposing you to non-payment risk.

Still have questions on Political Risk Insurance?

Speak to a Trade Advisor weekdays between 9 am to 5 pm EST.

1-888-220-0047

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Alicia McCarthy

Senior Trade Advisor, EDC

Alicia McCarthy  Senior Trade Advisor, EDC