purchase. Political risk insurance and terrorism cover are
sometimes confused, with companies wrongly believing that
terrorism insurance will provide a payout after political violence,”
explains Mr Watson.
“
Following the Thailand uprising, some organisations found
out too late that terrorism coverage would not respond and they
should have had political violence cover. Political risk insurance
includes forced abandonment. For example, the UK government
advised companies to withdraw from Libya, which they did,
mostly leaving their assets and equipment behind.”
The Willis Group has operated a full political risks capability
since 1979. “We are the global market leaders in this specialty
area and are renowned for creating innovative insurance products
to mitigate the risks of trading with, or investing in, volatile
emerging markets,” says Mr Watson.
“
Additionally, through our subsidiary Special Contingency
Risks Ltd, we specialise in policies to protect companies and
families living and working in remote or high risk regions of
the world, including such cover as kidnap, extortion, political
detention and hijack.”
While companies can assess commercial risk relatively easily,
political risk is harder to measure, Mr Watson concludes.
“
Insurance can be an effective risk transfer option for risks
linked to resource nationalism; however, so far not all mining
companies have recognised the threat.”
Resource nationalism is
regarded as the top risk of
doing business in metals
and mining whether
that is in developed or
developing economies.
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An active, self-funded explorer
Established track record of profits and dividends
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