Global instability driving demand for Political Violence Insurance cover
2 March 2022
Rising global instability as highlighted by the Russian invasion of Ukraine and increased investments in emerging markets is driving more demand for Political Violence and Political Risk insurance.
Political violence insurance provides cover for physical damage to property as a result of political risks and any financial loss.
It is aimed at mitigating the financial impact from property damage and business interruption by providing cover for risks typically excluded from traditional policies.
The terrorist attack on the World Trade Centre in New York on 11 September 2001 changed the insurance landscape with a total property damage loss of Euros 20.3 billion (USD22.7bn)—of which Euros 17 billion (USD19bn) was insured (Euros 3.7 billion (£3.11bn) in Lloyd’s of London) —and major insurers stopped providing terrorism insurance within property policies.
The cover a PV policy provides extends to war and/or civil war, riots, strikes and/or civil commotion, malicious damage, insurrection, revolution or rebellion, mutiny and/or coup d’etat and counter-insurgency.
Political risk insurance provides financial protection to investors, financial institutions, and businesses that face the possibility of losing money because of political events. It protects against the possibility that a government will take some action that causes the insured to experience a large financial loss.
Political risk refers to government decisions, social changes, economic policies, and other factors that can negatively impact on manufacturers, exporters, lenders and investors.
Political risk insurance can help protect companies against the financial impact of adverse political events and covers a wide range of potential problems.
Under most PR policies, the investor is generally required to show that an action or inaction by the government of the host country caused an expropriation, selective discrimination, political violence, nationalisation, currency inconvertibility, sovereign payment default, wrongful calling of on-demand guarantees and bonds and non-transfer or other event that falls under one or more of the specific coverages in the policy.
W Denis place insurance around the world and have direct access to Lloyd’s of London, if you wish to discuss your insurance requirements, please visit www.wdenis.eu or contact Vida Jarašiūnaitė firstname.lastname@example.org or Mark Dutton email@example.com