In a statement, Bob Peilow, managing director of Willis Global Solutions (International) and lead author of the report, says: “What shocks a lot of people about the latest wave of political unrest is the unpredictability around where it will happen next, and the fact that today’s stable or ‘investor-friendly’ regime can very easily become tomorrow’s hot spot. This is why it is so important that companies have the right coverage in place should the unthinkable happen.”

Toward that end, Willis says there are three main types of insurance coverage that companies concerned about political unrest should consider:

• Strikes, riots and civil commotions (SRCC) insurance.
• Terrorism coverage, which Willis says is known as the Lloyd’s sabotage-and-terrorism-only form.
• Full political violence coverage.

Of the three, full political violence coverage is the most comprehensive, dealing with a full range of civil unrest including revolution and coup d’état. Premiums are fixed at inception and will cover abandonment of property without physical damage.

There are exclusions for war between the five great powers; nuclear, chemical and biological attacks; expropriation; and theft. However, chemical and biological can be included under endorsement.

While insurers have not pulled coverage in unstable territories, they are reviewing their risk appetites to determine their “ability and desire to continue offering even the more basic form of SRCC.”

Specialist insurers, primarily Lloyd’s of London, are continuing to offer terrorism and full political violence coverage.

Touching on the issue of evacuation of staff from politically unstable situations, the report says that companies in the best position to help employees were those that obtained kidnap and ransom (K&R) insurance.

Under those policies, assistance and costs of evacuation of staff in places where political unrest arose were covered. The report cites several incidences where it was necessary to evacuate staff and clients did not know they had K&R cover until it was brought to their attention.

To be prepared, Willis advises that companies do some basic planning and preparation in advance of an emergency to ensure a smooth decision-making and implementation process.

Willis Group President Grahame Millwater notes: “Exposure to political unrest will only grow as global business continues to expand into new and often hostile territories where the threat of resource nationalism, creeping expropriation and supply-chain vulnerability is increasing. Our message to companies around the world is to use their brokers to navigate the insurance options available for these risks and to identify any potential gaps in their coverage.”