Investors, contractors, lenders and hedge providers (e.g. for commodities) are prepared to carry the commercial risk of participating in offshore investments or projects. However because of the unique nature of political risks, and their potential to expose an investment or project to significant losses, many investors, contractors, lenders and hedge providers take out Political Risk Insurance (PRI) from EFIC to cover them against financial losses resulting from specified political events.

EFIC can insure against losses arising from the following political events:

expropriation e.g. nationalisation of your investment or plant and equipment by the overseas host government;
war damage;
political violence; and
currency inconvertibility and exchange transfer blockage.

In certain circumstances, and depending on the type of policy required, cover may also be provided for other political events such as:

deprivation;
forced abandonment;
selective discrimination; and
default by the host government of an arbitral award following a breach of contract.

EFIC's PRI policies are generally available for extended terms, reflecting the nature of the investment, contract period or corresponding to the term of the underlying loan or hedge facility. Policy terms can extend to a tenor of up to 10 years. Also, EFIC's premium typically remains at a fixed rate.

Before embarking on a new project overseas, contact EFIC to find out whether your project would benefit from Political Risk Insurance.