Political risk insurance


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Political risk insurance

The risk associated with possible negative events such as expropriation of assets, changes in tax policy, restrictions on the exchange of foreign currency, or other changes in the business climate of a country.

Political Risk Insurance

An insurance policy protecting the policyholder from the risk that a foreign government will significantly alter its policies or other regulations so that it results in a loss for one's investment. It may also cover the risk that a nation will refuse to comply with an agreement to which it is a party, or that political violence will hurt an investment or business. For example, if one exports goods to a foreign nation, and that nation elects a new government that enacts protectionist tariffs, this will negatively impact the export business. Political risk insurance may be tailored to the policyholder's specific needs.
References in periodicals archive ?
The beauty of political risk insurance is that it is available in more than 150 countries including high-risk markets such as Afghanistan, Iraq, Democratic Republic of Congo and Rwanda.
MIGA addresses these concerns by providing political risk insurance for foreign investments in developing countries.
The first part is a 'primer' on the world of political risk insurance (PRI).
In countries where MD International has not been able to get political risk insurance "we are out of the picture," Morales-P6rez says.
Companies take out political risk insurance when exporting or investing overseas to cover themselves against financial losses resulting from specified political events," says Chang Foo, head of product management and risk transfer at EFIC.
A letter of credit also can reduce risk, as can insuring against certain risks, such as using political risk insurance.
The value of having political risk insurance as a mechanism to reduce investor's risk cannot be overstated in this emerging sector," said Leslie Durschinger, Founder, and Managing Director of Terra Global Capital.
Increased demand for our political risk insurance and credit enhancement products facilitates the expansion of private investment into emerging markets that creates jobs, builds infrastructure, and expands economic growth.
The following two chapters examine the relationship between sovereign default and expropriation, how investor perceptions of these risks differ from reality, and why demand for political risk insurance has risen the last four years.
Fortunately, insurers are willing to write political risk insurance against many of these perils.
They wanted to know how OPIC could, through its financing and political risk insurance products, help them to mitigate the risks associated with investing in developing countries and open the way to the developmental benefits associated with successful franchise operations--job creation, training, improved distribution networks and modernized business practices chief among them.
In addition, films and television shows usually carry insurance typical of any business operation, such as errors and omissions related to filmmaking, including copyright infringement, defamation-of-character claims, breaches of contract and trademark infringement; liability insurance to cover bodily injury and property damage to third parties; auto liability; umbrella liability; workers' compensation; and political risk insurance, including-terrorism coverage, if filming is done in a high-risk country.

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