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Political Risks

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The Risk

Any institution can directly or indirectly be a victim of political violence, such as strikes, civil commotion or riots. There are large corporations and individuals that could be exposed to dangerous environments such as failure to honour government guarantee or failure of sovereign guarantees.

 

The Solution

Howden India is a foremost specialist in arranging and structuring Political Risk covers for exporters of goods, services and finance to developing countries or into countries with unpredictable or difficult legal systems.

We arrange insurance cover for financiers against cross-border loans that may not be honoured in the event of a default, and we work closely with all the major and niche political risk insurers and guarantors including commercial private insurers and Government Export Credit Agencies.

We can also arrange political risk insurance for cross border project finance. We provide complete protection against Confiscation, Deprivation, Expropriation or Denegation for owners' or lenders' assets by the Government where the asset is located or registered.
Coverage is also provided against the adverse interven­tion of the judicial system to disengage the owner's rights and title:

  •  90% indemnity possible
  •  Cover available world-wide except for UN sanctioned countries

Selective discrimination and creeping expropriation can also be covered.

License Cancellation & Export Embargo

We structure License Cancellation and Export Embargo into political risk covers where defaults could occur due to loss of revenue resulting from foreign government or United Nations actions

  • Cancellation/Revocation/Non-Renewal of Operating, Exploration, Operating Licence
  • United Nations sanction
  • Unilateral embargo

Political Violence

 Specialised coverage can be provided protecting an investor’s assets against war, physical damage exposure to their assets whilst they are located in unstable jurisdiction; the cover protects against:

  • Riots, Strikes & Civil Commotion
  • Malicious damage
  • War on land
  • Forced abandonment

We can assist lessors and financiers with exposures in countries where the breakdown of law and order puts commercial operations at risk.

Contractors Plant and Equipment Cover

Where an investor is intending to invest in a developing or unpredictable country, by introducing either movable plant or equipment into a new venture, the investor should consider obtaining Contractors Plant insurance, which provides the dual benefits of broad political risk cover against Confiscation and Expropriation, along with non-cancellable war physical damage coverage protecting their plant against civil war, strikes, riots and civil commotion.

Asset non-repossession

  • Confiscation, seizure, detention by the foreign government
  • Inability to exercise legal rights under lease/finance agreement
  • Inability to remove the asset physically Inability to de-register
  • Inability to obtain proceeds of sale following
  • Divest ment in the foreign country
  • Inability to repossess due to UN sanction

For Further Information Contact:

Mr Vibhaw Kumar

Senior Vice President – Liability & Special Risks

Telephone

+91-22-6655 8810

Email

vibhaw.kumar@howdenindia.com