Political Risks and Trade Credit

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Overview

Beazley provides specialist insurance protection in respect of emerging markets, political violence, credit and wider political risks to a range of clients including:

Commodity traders
Foreign investors
Banks and financial institutions
Project financiers and sponsors
Forfeiting companies
Exporters and importers of goods and services

Details

We mitigate our clients’ cross-border risks in respect of assets exposed to political force majeure events such as wars, acts of terrorism, civil disturbances, and other forms of political violence.

Risks covered also include:

Embargoes, border closures, and other types of government interference including confiscation and deprivation of assets (whether fixed or mobile)
Selective discrimination
Cancellation of operating licenses or concessions
Inability to repatriate dividends or intercompany loans

These and other acts beyond the client’s control can lead to the cessation of their operations and the failure of their investments, as well as to business interruption losses.

For companies trading with public and private counterparties, we provide insurance to protect against government sponsored acts before and after shipment of goods, including:

Unilateral termination of a contract by a foreign government
Cancellation of import and/or export licenses
Non-delivery for pre-paid goods; non-payment
Inability to convert and/or transfer foreign currency
Non-honouring of payment instruments such as central bank guarantees or letters of credits
Refusal to pay arbitration awards
Wrongful calling of contractual bonds

In conjunction with our political risks account, we also provide insurance for commercial credit risk. Our trade credit account encompasses:

Traditional structures with privately owned counterparties for sale and/or purchase of goods and services on deferred payment terms or for which advances have been made
Buyer and supplier credits and insurance in respect of payment debt instruments (e.g. letters of credit, bills of exchange, promissory notes, etc.)

Cover is also available for more complex transactions reflecting the rapidly evolving sources of finance available to our clients and their emerging market counterparts. Examples of those transactions include structured trade finance, commodity finance, project finance and certain types of asset backed acquisition finance.