What is political risk insurance?

In any trading environment, domestic or international, political decisions and situations can impact on commerce.

Examples range from a violent change of political leadership, such as in war or a coup, to sudden changes in economic or foreign policies resulting in sanctions, tariffs or confiscation.

Political risk insurance recognises that these may impact on the ability of a supplier to deliver goods and services, or a customer to pay for them.

Political risk insurance is usually part of trade credit insurance cover that protects the policyholder from the risks of non-payment of invoices. So, if your customer fails to pay for goods or services – whether this has been caused by a political incident or other reasons as agreed - your insurance company will compensate you.

Political risk insurance definition

Political risk insurance protects the policyholder against the threat of financial loss caused by adverse political events. Depending on the individual policy’s details, this could include:

  • Civil unrest – resulting in riot damage or looting, or perhaps the blockade of a port preventing import/export
  • Currency changes – perhaps resulting in the inability to convert currency or the sudden and extreme change of a currency value
  • Customs and tariffs – an unexpected change in import/export rules
  • Expropriation – confiscation of money, property or a business by a government
  • Revolution or coup d’etat – violent or non-violent forced change of leadership
  • Terrorism or war – making trade with a country unsafe or unviable

Trade credit insurance

Trade credit insurance protects your cash flow so that you still get paid even if your customer defaults. It’s used by businesses of all sizes to protect both international and domestic trade from issues such as political risks and customer insolvency.

Atradius China Trade Credit Insurance works by insuring you against your buyer, not the individual transaction, so every invoice with that customer is covered for the year. In addition to providing protection against unseen adverse events, credit insurance is used by many businesses to promote trade. In particular many businesses use the security of credit insurance to help them secure finance with banks, explore new markets and attract customers with favourable credit terms. Our credit insurance customers work with us, benefiting from access to our information on millions of companies worldwide, to support their due diligence when assessing credit worthiness of trading partners.

Learn more about Atradius China Trade Credit Insurance.

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What is trade credit insurance?

Trade credit insurance guarantees cash flow. Learn how Atradius Credit Insurance protects business and promotes trade. Atradius China +86 21 61608022.

Why credit management is important?

Learn how good credit management helps prevent late payment and detects potential non-payment before it becomes a problem. Atradius China +8621 61608022.

About Atradius China

We provide Credit Management Consulting, Trade Credit Information Reports and Debt Collections for local and international businesses located in China, as well as companies worldwide.


The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.