Heritage International Assurance

Political Risk

POLITICAL RISK - INTRODUCTION.

Companies trading with third world or developing countries face a variety of political hazards.

Often the contractual principal will be a government entity leaving the company exposed to:

- Non Employment;

- Unilateral termination of the contract;

- Cancellation of import / export licences;

- War or Civil War;

- Trade Embargoes.

In circumstances where the contractual principle is non-governmental, the company may face exchange transfer difficulties in addition to "political" risks such as war, licence cancellation, etc.

Such companies are further exposed to:

- Wrongful calling of on demand performance guarantees issued to governmental buyers;

- Wrongful calling of on demand performance guarantees issued to non-governmental buyers as

a direct result of government action;

- Confiscation of mobile plant and equipment imported for completion of the contract;

- Confiscation of nationalisation of permanent investments, such as subsidiary companies.


Policy Type: click here