political risk insurance
USA
One of several risk mitigation tools available to investors involved in cross-border transactions, this insurance typically insures lenders and equity investors from and against losses incurred by the investors as a result of a political risk event. The cost of this insurance depends on the location of the insured asset, the extent of the coverage sought, the nature of the asset and the insurer. Political risk insurance can be obtained from private sources such as Lloyds of London and Sovereign Risk Insurance Ltd. and from public sources such as the Multilateral Investment Guarantee Agency and the Overseas Private Investment Corporation.For more information on political risk insurance, see Practice Note, Identifying and Managing Project Finance Risks: Political Risk (www.practicallaw.com/9-382-9356).

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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