Contact: Martin Phelan
Telephone: (03) 9603 2143
Contact: Abigail Skelcher
Telephone: (03) 9603 2817
Political risk insurance can help companies to manage the risks associated with operating in developing countries. It is designed to protect a company from financial losses that can result from government actions or political unrest overseas. This type of policy can provide protection from losses including:
- equity invested in a subsidiary or joint venture
- loans made to the subsidiary from the parent company
- loans from financial institutions that are guaranteed by the parent company
- inventory and receivables, mobile plant and equipment used by contractors
- other financial commitments or exposures such as performance, retention or advance payment bonds
- future profits
Any one of these losses could have a material impact on the results of the parent company, as well as the associated loss of shareholder value. Political risk insurance can also be provided to protect lenders to an international project or company against financial default resulting from such losses. Effective integration of political risk insurance in project finance transactions can deliver improved risk and financial outcomes to both project sponsors and lenders.
Marsh can assist companies with overseas operations by providing policies that provide cover for: |
