ABSTRACT
What Is Political Risk Insurance? Political risk insurance (PRI) is a specialized line of insurance that protects traders, investors, and lenders against noncommercial risks that interfere in the successful completion of trade contracts, the ability to own or operate investments successfully, or to service debt under the terms of a loan agreement. In the context of PRI, political risks are arbitrary or discriminatory actions, taken by home or host governments, political groups, or individuals, that have an adverse impact on international trade or investment transactions. Although such actions may be commercially motivated, quite often they are politically inspired. Their result is often the same: At a minimum, they can disrupt business operations; at worst, they can cause a business to shut down permanently.
