“The political risk fallout will be most substantive in elections which are closely contested and emotive. The heightened uncertainty generated by elections will also fuel interest in political risk cover, even in environments where political risk has not traditionally been a serious concern. The three main political risks are strikes, riots and civil commotion, terrorism, war and civil war. Creditors of a government may also seek to take out political risk cover to protect against a nation defaulting on its debts following an election. Businesses are increasingly turning to ‘contract frustration’ insurance and other forms of political risk cover to protect their interests.”
