When the Threat to Your Investment Is a Government, Not a Market.
Protection for capital, contracts, and assets in foreign countries
Political risk insurance protects companies with capital, contracts, or physical assets in foreign countries against losses caused by government actions and political upheaval that ordinary commercial policies leave uncovered. It responds to non-commercial, political perils — a government seizing property, blocking the conversion of local earnings, or a war damaging a plant — rather than to ordinary business or credit failure.
For investors, lenders, exporters, and contractors operating in emerging and frontier markets, these are the exposures that can wipe out an otherwise sound venture. The coverage is placed across private, government, and multilateral markets and is often a condition of cross-border project finance.
What Political Risk Insurance Covers
Coverage is bought by peril, singly or in combination, against government-driven loss:
Expropriation & Confiscation — Covers outright government seizure of assets and "creeping" expropriation through discriminatory taxes, forced divestiture, or license revocation.
Currency Inconvertibility & Transfer Restriction — Covers the inability to convert local-currency earnings to hard currency or a government block on moving funds out of the country.
Political Violence — Covers physical damage and business interruption from war, revolution, coup, civil unrest, sabotage, and terrorism.
Breach or Repudiation of Contract — Responds when a government entity breaks a contract and the investor cannot collect on an arbitral award.
Wrongful Calling of Guarantees — Reimburses an improper government drawdown of a bid, performance, or advance-payment bond.
Non-Honoring of Sovereign Obligations — Responds when a government or state-owned entity fails to pay a due, undisputed financial obligation.
What It Does Not Cover
Political risk is distinct from commercial risk, which drives the key exclusions:
Ordinary commercial and credit risk, such as a private buyer's insolvency
Currency devaluation or depreciation, a market movement rather than a transfer block
Pre-existing or publicly known political conditions at inception
Losses the insured caused, provoked, or consented to, or caused by its own breach
Sanctioned countries and parties, and nuclear or radioactive contamination
Who Needs Political Risk Insurance
Coverage fits any party with cross-border exposure to political events, including:
Multinationals and equity investors with subsidiaries, plants, or mines abroad
Exporters selling to foreign government buyers or into unstable markets
Contractors and EPC firms with overseas projects and posted bonds
Banks and project-finance lenders, who often require it as a condition of lending
Oil, gas, mining, power, and infrastructure developers with immovable sunk assets
How Coverage Is Structured
Political risk is a long-tail, structured line placed across several kinds of markets:
Perils are selected à la carte on standardized or custom-worded policies
Terms are matched to project or loan life, commonly 3 to 15 years and longer with multilaterals
Insurers cover a high but not full share, with the insured retaining a coinsurance portion
Claims, especially inconvertibility and breach, typically carry a waiting period to attempt a cure
Capacity spans the private and Lloyd's markets, the U.S. government's DFC, and the World Bank's MIGA, with large deals syndicated across carriers
Real-World Claim Examples
A government nationalizes an oil or mining venture and transfers it to a state entity, triggering expropriation cover
A central bank imposes capital controls blocking a subsidiary from repatriating dividends
Civil war or a coup damages an insured factory or forces a prolonged shutdown
A foreign government buyer improperly draws on a contractor's performance bond
A state utility repudiates a power-purchase agreement and defaults on the resulting award
Why Proper Placement Matters
The line is defined by wording and structure, so placement turns on:
Distinguishing a covered political loss from an excluded commercial one, the most common dispute
Selecting the right combination of perils, since inconvertibility, expropriation, and violence are separate
Matching triggers — breach cover may require an unpaid arbitral award, non-honoring pays on default
Disclosing the country situation accurately, since known risk can void cover
Sizing limits and tenor to the exposure and coordinating private, DFC, and MIGA capacity
Regulatory & Contract Context
Project-finance lenders frequently mandate political risk insurance as a condition of funding, and the involvement of the U.S. government's DFC or the World Bank's MIGA can itself deter host-government interference. Eligibility rules apply — DFC generally requires a U.S. nexus and a development mandate, while MIGA covers investment into its developing member countries. Sanctions regimes constrain what insurers can cover, anti-corruption compliance is often a condition, and the coverage complements but does not replace protections under bilateral investment treaties, so investors often pursue both an insurance claim and treaty arbitration.
Our Approach
At Cory Washington & Co., we structure political risk cover to the deal — selecting the perils your exposure actually faces, matching tenor to the asset or loan, drafting triggers so a breach or non-payment claim actually pays, and coordinating private-market, DFC, and MIGA capacity to reach the limits large projects need. We align the underwriting assumptions with how the venture is really structured so a political loss isn't recharacterized as a commercial one. We also insure related exposures, including ocean marine, cargo, and general liability.
Our goal is coverage that stands between your foreign investment and a hostile government act — placed with the right markets and the right wording.
All insurance descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or insurance advice. The information presented is general in nature and does not guarantee the availability, terms, conditions, or scope of any insurance coverage. Actual coverage is determined solely by the specific policy language issued by the insurer and remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds coverage, or alters any existing policy. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please consult directly with a licensed insurance professional at Cory Washington & Co. LLC or another qualified insurance professional, and always review your policy documents in full.
See what to confirm in a political risk policy — what's standard, what's often limited, and what to add if needed — plus the gap most often missed, in the Political Risk Policy Feature Checklist.
Complete the Political Risk Supplemental online in a few guided steps, download the fillable PDF, or browse all applications.
Frequently Asked Questions
How do I get political risk insurance through Cory Washington & Co.?
Request a quote or contact our team. We start with a short conversation about your operations, analyze your exposures, then negotiate political risk insurance across multiple carriers that compete for your account and present options with the trade-offs explained. Cory Washington & Co. LLC is licensed in all 50 states.
How are political risk insurance premiums priced?
There is no flat rate. The cost of political risk insurance reflects your industry, your size (payroll and revenue), your claims history, and the limits and deductibles you choose. We market your account to multiple carriers, compare the real quotes side by side, and explain what is driving each number so you can weigh coverage against price with confidence.
Is political risk insurance mandatory?
Requirements vary. Political risk insurance may be mandated by statute, or required under your contracts, leases, or loan agreements — and in many cases it is simply prudent given the risks involved. We look at your specific obligations and exposures, then recommend the coverage and limits that fit.
What if another agency has already declined or non-renewed my coverage?
Difficult, specialty, and previously-declined placements are a core part of our work. We access excess & surplus (E&S) and specialty markets that many generalist agencies cannot, and we explain the trade-offs clearly so you can decide with confidence.
Available in all 50 states. See how requirements differ in California, Texas, Florida, New York, or choose your state.