Expropriation Insurance

Host government interference can have devastating consequences on foreign investments and operations for multinational companies. 

What is it?

Expropriation insurance protects against confiscation, expropriation, nationalisation, and other host government actions which deprive foreign investors of their rights of ownership or control of their assets.

Related political risks that are covered include forced abandonment, selective discrimination, business interruption and "creeping expropriation" which is a series of individual government actions which, taken together, effectively result in expropriation.

This political risk insurance can also cover non-transfer of dividends, royalties, or other funds following the sale of an asset or disposal of an investment and arbitral award default and denial of justice coverage for debt and equity investors.

 

Who is it for?

Expropriation insurance is purchased by exporters, lenders, investors, and contractors with inventories, equipment, or other assets located in foreign countries. Natural resources companies and those involved in infrastructure projects are some of the leading buyers of Expropriation cover because these are long term, big-ticket, investments in a fixed asset that are susceptible to seizure by a host government.

Why do companies buy it?

The constant demand to find new natural resources means that energy and mining companies, in particular, confront the challenges of operating in politically volatile territories. These challenges include exposure to political instability, regulatory uncertainty, challenging fiscal regimes and discriminatory acts.

Host government interference can have devastating consequences on foreign investments. Companies buy Expropriation and broader Political Risk Insurance (PRI) to protect investments against expropriatory acts and other forms of improper intervention by host governments that deprive them of their fundamental rights in a project.

Expropriation insurance:

  • provides balance sheet protection,
  • protects shareholder interests, and
  • safeguards against catastrophic loss.

  

Need advice on cover?

JLT Specialty Limited is one of the strongest and most successful political/credit risk insurance brokers in the market. Handling insurance capacity for our clients of approximately USD50bn at any one time.

For advice and guidance on obtaining Expropriation cover, contact Dr. Elizabeth Stephens

 

 

World Risk Review

Expropriation is one of the nine risks that you can monitor across 197 different countries with World Risk Review: a strategic decision making tool designed to help corporations, banks and other organisations involved with international trade. providing short- to medium-term assessment of risks associated with their investments.

Featuring the latest news and the expert opinion, you'll be able to track political and economic perils such as political violence and changes in trading and investment environments, and Bronze membership is free.

  
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