Marine and political risk insurance
Political risk insurance: what it covers and when you need it
Political risk insurance covers expropriation, currency inconvertibility, political violence and contract frustration. How it works, who provides it and the 2026 market.
Guide
Marine and political risk insuranceLast updated
3 minute read
By Zed Three analysts
Short answer
Political risk insurance protects companies investing or trading abroad against losses caused by government action or political events, such as expropriation, currency inconvertibility and transfer restrictions, political violence and breach of contract by a state. It is sold by private insurers, including at Lloyd's, and by public bodies such as the World Bank Group's MIGA.
Last updated
The main covers
Expropriation and nationalization; currency inconvertibility and transfer restriction; political violence, including war, terrorism and civil unrest; contract frustration or non payment by a government or state owned buyer; and wrongful calling of guarantees. Currency depreciation itself is usually excluded.
Why demand is rising
Berne Union members paid record political risk claims of US$11.1 billion in 2025. In the Sahel, Mali, Burkina Faso and Niger expanded state control of mines in 2025 and 2026, including Mali's seizure of Barrick's Loulo-Gounkoto complex, settled in November 2025. Investors are pricing those risks into new projects.
How the market looks in 2026
Capacity is broadly available, but limits are tight for some high demand countries. MIGA reported US$41.4 billion of gross exposure against US$48.9 billion of capacity at June 30, 2026. Buyers should start early, because underwriters want a clear picture of the project, the host government and the exit options.
What happens next?
We assess it is likely that political risk claims stay elevated through 2027 as Sahel and Middle East exposures work through.
We assess it is likely that capacity for the most sought after host countries remains constrained into 2027.
Likelihood ranges are Zed Three editorial judgments as of Nov 2, 2026, not advice.
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Related country risk assessments
Frequently asked questions
What does political risk insurance not cover?
Typically ordinary commercial losses and currency depreciation. Read the definitions of each peril closely.
Who sells political risk insurance?
Private insurers, including Lloyd's syndicates, export credit agencies and multilateral bodies such as MIGA.
Do I need a country risk assessment first?
Underwriters will expect one, and a clear view of the host country's political trajectory helps you choose which perils and limits to buy.
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