Home > Property & Casualty > Egypt unrest emphasizes need to analyze political risks

Egypt unrest emphasizes need to analyze political risks

The political protests in Egypt have shut down internet and other communications systems.  Business has been interrupted both locally on the ground and for companies that do business with Egyptian customers.   Travel companies have been unable to confirm local conditions and they have had to cancel tours.  Importers have been unable to confirm letters of credit and other essential information that allows for the flow of goods from Egypt.  Companies with manufacturing and distribution facilities are concerned about acts of vandalism amid the rioting.

Most of the financial losses that may result from these events are not insured by most companies.  Business interruption from the shutdown of internet services or other financial services might only be insured via political risk insurance, something that is not purchased by most businesses.  Actual acts of vandalism would be an exception.  There may be coverage depending upon the nature of local coverage and the impact of any global DIC (Difference in Conditions) coverage.

The possible contagion of political unrest from Tunisia to Egypt to other countries has businesses reconsidering their prior decisions to self-insure these risks.

(Image via: REUTERS/Goran Tomasevic)


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  1. May 4, 2011 at 5:38 am

    Very interesting post! 🙂

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