Half Moon Passage, 17-19 Alie Street, London, E1 8DE | Tel: +44 (0)20 7481 3030
Credit and Political Risks Insurance | Corporate Finance
Political Risk - Lenders
Political risk insurance coverage for bank to protect against non-payment by the borrower of principal and interest due to creditors as a result of certain defined events. Bespoke coverage must be obtained for this form of insurance protection, with cover including but not limited to the following political risk events:
- confiscation, expropriation, nationalisation and deprivation
- currency inconvertibility or non-transfer
- sanctions
- war and political violence
- licence cancellation
- breach of contract by a host government
Policy tenors are in general up to five years depending upon amongst other things the country of risk and industry sector. However, in certain circumstances policy terms can be obtained for seven to ten years.
It is possible to obtain 100% coverage, with the insurance either being arranged specifically by each interested lender or by the borrower for the benefit of the lenders.