Political Risk Insurance

Political Risk Insurance (PRI) is an insurance product that covers the risk of loss to investors or exporters caused by political events in the host country. It mainly covers political risks such as war, civil unrest, expropriation, exchange transfer restrictions, and government breach of contract. In foreign trade, exporters or investors exporting to or investing in high-risk countries can purchase PRI to mitigate losses such as payment default or asset confiscation caused by political instability, foreign exchange controls, or government changes in the importing country. Use cases include: long-term export credits to emerging market countries, overseas engineering projects, resource development investments, etc. Notes: PRI typically does not cover commercial risks (e.g., buyer bankruptcy) and must be distinguished from export credit insurance; when underwriting, the scope of coverage, exclusions, and claims conditions must be clearly defined; premiums are relatively high, and country risk assessments are required. The difference from export credit insurance is that PRI focuses on political events, while export credit insurance mainly covers commercial credit risks; the two can be used complementarily.