Credit & Political Risk Insurance

Trade Political insurance protects businesses and financial institutions from losses resulting from political events or credit defaults that impact international trade and investments. These risks can include government actions, political instability, or customer payment defaults.

Credit Risk insurance is a type of insurance policy that protects businesses from financial losses due to non-payment by their customers. It ensures that businesses are covered if their buyers are unable to pay for goods or services, whether due to insolvency, bankruptcy, or other payment defaults.

Companies involved in international trade, exporters, importers, and lenders financing cross-border transactions often benefit from this type of insurance. It’s particularly important for businesses operating in politically or economically volatile regions.

Businesses of all sizes, from small enterprises to multinational corporations, that extend credit to their customers can benefit from Trade Credit insurance. It is particularly useful for companies operating in industries with significant payment risks or those looking to expand into new markets.

The insurer assesses the geopolitical and credit risk of the markets where a business operates. If a covered event occurs, resulting in financial loss, the policy compensates the insured for those losses, subject to the policy terms.

While closely related, Credit Risk insurance and Trade Credit insurance serve different needs.

Trade Credit insurance typically covers short-term, transactional non-payment risks in business-to-business trade — such as unpaid invoices due to buyer insolvency. It’s commonly used by exporters and manufacturers with high volumes of receivables.

In contrast, Credit Risk insurance is broader and more strategic. It’s often used for longer-term, structured or sovereign-backed obligations, including political risk, non-honouring of guarantees, and project finance exposures.

At Canopius, we underwrite both trade and non-trade credit risks, including bespoke cover for fund finance, infrastructure lending, and capital market structures.

Yes, policies can be tailored to fit the specific needs of a business or project. Coverage can focus on particular countries, risks, or types of transactions.

Credit Risk insurance can be tailored to cover a wide range of complex financial exposures beyond simple payment default.

Typical risks include commercial non-payment by private buyers, sovereign default, and political risks such as expropriation, war, terrorism, embargoes, currency inconvertibility, and contract frustration.

Our policies are often structured for financial institutions, corporates, and export credit agencies. They support long-term lending, project finance, receivables-backed structures, and strategic investments in emerging markets.

• Protects against unexpected losses from political or credit risks.
• Provides confidence to expand into emerging markets.
• Enhances access to financing by securing receivables.
• Strengthens business resilience during uncertain times.

Businesses that need Credit insurance typically include those who extend credit, lend capital, or face risks from payment default or political instability. This can apply to exporters, manufacturers, banks, project financiers, and multinational corporations, especially for businesses in emerging markets or who have long-term payment terms.

Look for insurers with expertise in the countries and markets you operate in. Assess their track record, policy flexibility, and customer reviews to make an informed decision.

A Credit insurance policy compensates the insured for a portion of losses if a debtor fails to pay due to covered events. The insurer evaluates the creditworthiness of buyers or countries, sets credit limits, and pays claims if approved debtors default. This protection helps maintain cash flow, enables safer business growth, and may improve borrowing capacity.

Trade Political insurance covers a broad range of political risks including government actions such as expropriation, currency inconvertibility, breach of contract, non-payment, non-delivery and political force majeure events such as war or terrorism.