Political risk is the probability that political decisions, events or conditions will result in losses. Politics affect everything from taxes to interest rates and political events can dramatically impact the price of assets or cost of doing business.

What is political risk and why is it important?

Political risk is the risk an investment’s returns could suffer as a result of political changes or instability in a country. Instability affecting investment returns could stem from a change in government, legislative bodies, other foreign policymakers or military control.

What is credit and political risk insurance?

Credit insurance is the provision of insurance against the non-payment of the customer against an insured occurrence (i.e. contractual disagreements and insolvency). Political risk insurance plays the role as an insurance policy for businesses that are purchasing from potentially instable countries.

What is political risk assessment?

Political Risk Analysis is essentially the capacity of employing the International Relations knowledge to analyse the world politics from the business perspective and foretell future political developments that could be potentially harmful for investment.

What are the two types of political risk that affect companies?

In general, there are two types of political risk: macro risk and micro risk.

What do you need to know about political risk insurance?

Such businesses can protect themselves against financial losses by purchasing political risk insurance. A business may suffer a loss of income if forced to shut down all or part of its operations due to political violence or acts by a government. Political risk insurance covers financial losses that result from several types of risks.

How does political risk affect the business world?

Political risk can affect manufacturers, exporters, lenders, investors, and non-profit organizations. Such businesses can protect themselves against financial losses by purchasing political risk insurance.

What is political risk insurance for importers and exporters?

Political Risk Insurance for Importers and Exporters provides comprehensive protection against loss due to political instability, including product confiscation and non-payment.

How is the location of political risk determined?

Political violence insurance provides cover for physical damage to property as a result of political risks and any consequential financial loss. The risk location for immovable property is determined by the territory in which the property is situated. If the property is situated in more than one territory, then there may be multiple risk locations.