HDFC ERGO General Insurance Company has launched a political risk insurance policy, whereby companies operating internationally will be protected against arbitrary government actions and their investments protected.
The policy will also safeguard businesses against unfavourable currency inconvertibility, the general insurer said in a statement.
The policy is designed to protect investors’ investments in overseas markets against unpredictable losses due to specified political perils such as expropriation, selective discrimination, forced abandonment, forced divestiture, political violence and currency inconvertibility, it added. Political risk insurance is available to investors, lenders, contractors, exporters, and other similar entities for safeguarding their foreign assets or investments.
According to the statement, the insurance will allow businesses to take advantage of expansion opportunities in emerging markets and also manage risks of existing investments.
Ritesh Kumar, CEO and Managing Director, said: “…all businesses today are looking to spread their wings and go beyond the national borders. But the unpredictable political events can have an adverse impact on businesses’ overseas operations and can destroy the value of the investment.”
Currently, Export Credit Guarantee Corporation of India and ICICI Lombard General Insurance cover risks in respect of goods exported. Their policies cover commercial as well as political risks.