For instance, licences or contractual rights may be revoked or assets may be damaged. Often, entrepreneurs only then find out that their financial losses are not covered by standard all-risk insurance policies and that stand-alone cover for political violence does not always cover all unexpected events. With dire consequences
Is nothing possible beforehand then?
Fortunately, it does! You can even prepare well for the potential impact of unforeseen political upheavals. Various political risks can be insured on your credit insurance policy. Generally, these situations or events fall under political risks:
- Moratorium: deferral or suspension of a payment obligation by a company or a country
- Currency transfer risk
- A generally binding measure taken in the country of the debtor
- War: with the exception of the 5 superpowers among themselves
- Natural disaster: a cyclone, flood, earthquake, volcanic eruption, tidal wave or other form of natural disaster in the debtor's country
- Impossibility of contract execution
- Withdrawal of export licence
- Government failure: the failure or refusal of a government debtor to perform any provision of the contract. This covered cause of loss applies only if the credit limit decision states that the debtor is a government debtor.
Don't be surprised!
The only thing predictable is that everything is unpredictable. A credit insurance policy covers various political risks. So you can continue to do business abroad with peace of mind.
