Investments in emerging markets face threats that ordinary commercial policies ignore. Political risk insurance covers losses caused by government actions such as expropriation, political violence, currency inconvertibility, and breach of contract by a state entity.

Buyers include multinational corporations, lenders, and investors in infrastructure and natural resources. Coverage may be provided by private insurers, government export-credit agencies, or multilateral institutions. Policies are tailored to the specific project, country, and type of political peril.

Underwriting assesses country risk, the investor’s relationship with the host government, and structural mitigants such as arbitration clauses. Claims can be complex and politically sensitive. The coverage enables transactions that would otherwise be too uncertain, while the insurer relies on recovery rights and diplomatic channels after a loss.

• Coverage for losses from political events abroad
• Includes expropriation, violence, and inconvertibility
• Used by investors and lenders in emerging markets
• Provided by private and public-sector insurers