International risk insurance is designed to protect businesses and investors from a diverse array of risks inherent in operating or investing across borders. Some of the typical claims associated with international risk insurance include:
Political Violence and Terrorism: Claims resulting from damage to assets or interruption of business operations due to acts of terrorism, civil unrest, riots, revolutions, or insurrections in the host country.
Expropriation: Claims arising when a foreign government seizes or nationalizes an investor's assets without providing adequate compensation.
Currency Inconvertibility: Claims related to the inability to convert local currency into foreign currency for transfer out of the host country, usually due to government-imposed restrictions.
Breach of Contract: Claims resulting from a foreign government or its agency violating terms and conditions stipulated in a contract with the investor or business.
Wrongful Calling of Guarantee: Claims stemming from the unjust invocation of a financial guarantee by a host government, usually in projects where such guarantees were provided as a performance or financial assurance.
Political Force Majeure: Claims resulting from events like wars or revolutions that make it impossible or impractical for a business to fulfill its contractual obligations.
Trade Credit Risks: Claims related to defaults on payment by foreign buyers due to insolvency or protracted default.
License and Permit Cancellations: Claims arising when a foreign government arbitrarily cancels or doesn't renew a business's operating license or permit.
Kidnap and Ransom: Claims related to incidents where employees or executives are kidnapped while on international assignments and a ransom is demanded.
Legal and Regulatory Changes: Claims arising from unexpected changes in the legal or regulatory environment of the host country that result in financial losses for the investor or business.
Understanding these typical claims underscores the multifaceted nature of risks when operating or investing internationally.International risk insurance serves as a critical tool in mitigating such exposures, allowing businesses and investors to navigate global landscapes with an added layer of financial protection.
