Multinational companies seeking comprehensive terrorism and political violence insurance on their international land-based assets will be interested to know that political risk insurance broker BPL Global has launched its Global Political Violence Insurance cover.

Reflecting increasing world instability and addressing the blurred distinction between different forms of political violence, the policy covers the full spectrum of political violence – not only terrorism. It has a global application, but is particularly aimed at corporate assets in emerging markets, which tend to be more vulnerable to political violence and where cover needs to be wider than terrorism alone.

Charles Berry, chairman of BPL Global, argues that: “Paradoxically, major corporations have even less political violence coverage in place today than they did prior to 9/11. General property insurance policies have always excluded war and related risks. They now usually exclude terrorism. So, many corporations have no cover for any form of political violence, particularly for their emerging market assets”.

Key features of the new policy wording include coverage for the broadest possible range of political violence acts, of which terrorism is only one. Others acts include: civil commotion, riot and looting; uprisings, rebellions and coups; and war and civil war. The policy also offers: increased continuity through no cancellation provisions, a fixed premium for the policy period, and mid-year renewal options; it also provides a pay-out if the policy-holder is unable to rebuild a property. Of critical importance is that the policy has the flexibility to be tailored to address the exclusions and ambiguities of existing general property policies and to clients” individual needs.

This new product is being supported by leading specialist insurers including: Beazley Furlonge Ltd, Catlin Underwriting Agencies Ltd, Hiscox Syndicates Ltd, Liberty Syndicate Management Ltd and Wellington Underwriting plc.

The BPL Global policy is particularly effective for risks in emerging markets. The spectrum of political violence likely to be encountered in many of these countries is broad. It embraces not just terrorism but risks associated with the collapse of social order; ongoing insurgency movements; actual or de facto civil war; and war between nations. This wide range of political violence can be seen in, for example, Afghanistan, Iraq, Indonesia, Colombia, Liberia, Zimbabwe, Chechnya, and other areas of tension around the world.

Charles Berry explains, “The distinctions between different forms of political violence are blurred. Political violence is a continuum. Terrorism can provoke rebellion, civil commotion or civil war that may result in international intervention, which is seen as invasion and an act of war, and that, in turn, may provoke further terrorist activity or insurgency. The advantage of our wording is not only that it covers a broad spectrum of political violence, but also – and equally important – it does not exclude acts of terrorism prompted by war, civil war, rebellion, etc.”

Tim Hardy, who heads the war, political and trade risks group at leading London insurance lawyers, Barlow, Lyde & Gilbert, picked up the theme of the dangers inherent in broad war exclusions for companies seeking to cover terrorism in a recent article in BLG Insurance Law Quarterly and Briefing Note. He warned of conflicts over policy language where policies attempt to cover some forms of political violence and exclude others. He concludes: “.. distinguishing losses attributable to excluded acts of war (or associated risks) and lesser acts of violence and destruction, will continue to pose difficulties”.

Berry comments: “Chechnya provides a good example. If events there are not full blown civil war, they certainly amount to rebellion. Is a terrorist act committed by Chechen sympathisers elsewhere in Russia covered when a “terrorism only” policy excludes losses indirectly occasioned by civil war or rebellion

  • Our Global Political Violence Insurance does not exclude civil war and rebellion; it covers them.”


The new product can also be expanded to a broader investment insurance policy covering political risks such as expropriation, abandonment of operations, breach of contract and currency inconvertibility. This brings into play additional capacity from private market insurers such as ACE, AIG, Chubb, Sovereign, Unistrat and Zurich who also write political violence cover, but only as part of an investment insurance policy.

Berry adds: “The novel feature of our Global Political Violence Insurance is that it provides broad form political violence cover on a stand-alone basis. Since 9/11, government-backed arrangements such as TRIA(US), Pool Re (UK), Gareat (France) and Extremus (Germany) have helped respond to the withdrawal of terrorism cover by the general insurance market. However such schemes only cover assets in each government’s home market. Furthermore take up of some government backed terrorism insurance programmes has been limited due to gaps in cover, lack of flexibility and pricing issues”.

Stephen Catlin, chief executive of Catlin Group, says: “BPL Global’s new wording will help us establish political violence cover for land based assets as a speciality insurance product. We agree that political violence cover does not sit well in a general property insurance account. However, political violence can be underwritten soundly on a stand-alone basis in a specialist account: we monitor our exposure per square kilometre of the globe; we write within set local, regional and country aggregates; we price each risk correctly; we model our portfolio and allocate capital to reflect the volatility inherent in a political risk account; and we monitor closely both terrorist groups worldwide and the political and economic situation globally. Our political violence and political risk book complements our other lines of business”.

Adds Stephen Ashwell, underwriter at Hiscox Syndicates: “Since 9/11 we have seen a large volume of stand-alone political violence business coming to London, mainly seeking to add back the terrorism risk, now excluded from the general property insurance. We want to develop this book further. We want to advertise our broad capabilities in the political violence and political risk sphere; and we recognise that we need to offer a broader political violence cover for emerging market assets than the pure terrorism coverage we have provided in the US or Western Europe; that is why we support BPL Global’s initiative.”

Nick Robinson, underwriter at Wellington Underwriting, says: “Wellington is an experienced underwriter of all forms of political risks and we aim to provide effective political violence insurance for emerging market assets with clear, well thought out language. BPL Global’s new policy furthers this aim. We have the capability and appetite to offer this broader cover. We are prepared to support this initiative to provide the broad political risk insurance capacity the market requires.”

Tina Kirby, underwriter at Beazley Furlonge, agrees. She says: “Beazley specialises in underwriting, inter alia, global political risks and property policies. Standard property policies clearly exclude war, civil war and possibly terrorism but are at best ambiguous on the perils in the wider political violence spectrum. The current environment of political uncertainty and widespread resistance to political and economic change makes it increasingly difficult to differentiate between “pure” civil war or terrorism and other related perils so we welcome the clear language and approach of the new BPL Global policy as a comprehensive solution to a client’s political violence needs.

Geoffrey Lynch, class underwriter at Liberty Syndicate Management, concludes: “Once again BPL have applied considerable intellect in providing a relatively simple solution to a problem which only the more discerning insureds would have realised that they had. This new BPL product effectively covers the gaps which arise when utilising the existing range of standard products; as things stand, it would be all too easy for a loss to fall between two stools. The clarity which this new product provides, both as to scope and certainty of cover, should prove a godsend to embattled risk managers and their advisers.”