When you’re selling to a foreign government or public-sector buyer, contract frustration insurance or contract repudiation insurance protects against non-payment or arbitrary non-honoring of your contract, either before or after your shipment of goods or performance of services. Political risk insurance is also available to protect against non- honoring of sovereign government payment guarantees, whether the buyer is in the public or private sector.
Other kinds of policies can be written to insure against the political risks of non-payment on your sales to private- sector buyers, for example to cover your sales to your company’s own subsidiary located in a market with high political risks or any buyer for whose receivables you will not or cannot purchase comprehensive export credit insurance but in any event who might be unable to pay due to expropriation, currency inconvertibility or transfer risks, political violence, or other government actions or political events that would be out of their control.
