Political risk insurance is a tool that’s extremely useful for any company doing business in an emerging market, where there is a risk of political violence, or other types of upheaval that could result in a loss of property, investment, or assets.
Many different financial institutions and insurance companies offer political risk insurance. And, whether you already have a policy or you’re thinking about investing in this product, you may be wondering what it’s like to file a claim. In this quick post, we’ll discuss three of the top tips we have for filling your claim, so you’ll know what to expect.
- Know Your Policy (Before You Have To Use It)
The exact coverage that you receive will depend on the policy you have purchased, and the phrasing and language in which it’s written. We highly advise that you have a competent professional look over any policy that you purchase. What coverage will political risk insurance include? Here are a few of the most commonly-covered events:
- Political violence, such as rioting, insurrection, civil war, terrorism, war, etc.
- Governmental expropriation and confiscation of private assets
- Government frustration, rejection, breach, or repudiation of a contract
- Wrongful calling of letters of credit
- Business interruption
- Currency issues, including inconvertibility or inability to repatriate funds to your country
You should have a good understanding of what your policy covers, to ensure you file a claim at the right time.
For example, your policy might cover you if an attack on an oil rig by a militant group results in its loss – but not if political unrest causes a drop in the oil commodity price. It all depends on your policy.
- Get In Touch With Your Insurance Company As Soon As You Can
Keep a close eye on the political situations in the countries in which you’re doing business, and contact your insurer as soon as you notice any issues that may result in the need to file a claim. The sooner you file a claim, the sooner you can be compensated.
- Be Prepared For A Lengthy Review And Approval Process
Sometimes, your situation will be very clear-cut. If a government seizes your assets and facilities, for example, and this is confirmed, you likely will be compensated quite quickly. But, given the murky nature of political unrest and violence, things are not always so clear. The process of reviewing and approving an insurance claim can take some time. Be patient, work with your insurer, and provide them with everything they need to help speed up the process.
Let Niche Trade Credit Help You Find The Right Policy And Insurer!
As experienced insurance brokers in Sydney, Niche Trade Credit can help Australian businesses get the political risk insurance coverage that they need to protect themselves from political violence, seizure of assets, and other such risks.
If you’re interested and would like to learn more, please contact us right away. We can answer any questions you might have, and help you understand more about this unique type of risk protection insurance.
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