There are two kinds of political risk insurance: contract frustration and asset protection.
Contract Frustration: Companies doing business directly with foreign governments, or with government contractors, obtain political risk insurance to protect against payment defaults, license cancellations, or repudiation of their contracts.
Asset Protection: Lenders, investors, and contractors with equipment, inventories, or cash in foreign countries purchase political risk insurance to protect their assets against expropriation, political violence, and currency inconvertibility.
When you’re doing business with a foreign government or government-owned entity, political risk insurance can protect against non-payment of your invoices or non-honoring of your contract, either before or after your shipment of goods or performance of services.
Political risk insurance can also be written to indemnify against frustration of your contracts with private-sector entities that might be unable to perform due to local/international government actions or political events that would be out of their control.
If your business relies on licenses issued by foreign governments, then political risk insurance can cover you against cancellation of import or export permits, as well as embargos, boycotts, sanctions, or decrees causing business interruption, payment defaults, or other losses.
This kind of political risk insurance protects against confiscation, expropriation, nationalization, and other foreign government actions or political events which would deprive you of your rights of ownership, security interests, or control of your assets situated in other countries.
It also covers your ability to repatriate your assets, for example getting your equipment out of the country after completing a contract or the return of equipment following the termination of a lease agreement.
Political risk insurance can cover inconvertibility of local currency into US dollars or other hard currency, as well as the inability to transfer hard currency out of the country.
Currency inconvertibility policies apply to losses resulting from financial crises, hard currency shortages, exchange controls, or arbitrary political decisions by a foreign government.
This kind of political risk insurance protects against non-payment, loss of income, business interruption, loss of equity investments, or damage/destruction of physical assets due to political violence.
Covered political risks include war, revolution, civil unrest, rioting, public strikes, armed uprising, insurrection, terrorism, sabotage, acts of malice, or other political events or government actions.
Meridian Finance Group has specialized in brokering political risk insurance for over 20 years.
All policies brokered by Meridian are backed by top-rated insurance companies or by agencies of the federal government (Ex-Im Bank, OPIC, et al). We offer policies from every political risk insurance underwriter, enabling us to quote the most competitive terms and premium rates in the market.
More significant than Meridian’s ability to place coverage is the comprehensive technical support we provide to our customers. Political risk insurance policies work differently from other kinds of insurance, so Meridian assists with policy compliance at the same time as we help our clients get the most out of their insurance as a sales, strategic, and financing tool.
We understand your business. Our staff is multicultural and multilingual, with experience not only in brokering political risk insurance but also exporting, importing, trade finance, foreign investment, and contract management.
Meridian Finance Group is a recipient of the President's “E” Award for exceptional support of international trade.