Political Risk Insurance

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Selling outside of Canada? Consider Political Risk.

When selling goods or services internationally, a best practice is to review your Trade Credit insurance policy with your broker. Establish whether risks can be managed via insurance, either by specific policy endorsements to an existing trade credit insurance policy or by a standalone political risk policy.

Key political risks that cause a foreign buyer to repudiate or default on payment on a short-term sale are:

  • Expropriation, confiscation or nationalization affecting exporter or importer
  • Currency transfer and convertibility preventing currency exchange and payment transfers from the buyer country
  • Political violence, including war, affecting the exporter or importer
  • Cancellation of import or export permits associated with the transaction