What is political risk?
This is the risk that a buyer cannot pay or that goods cannot be delivered due to circumstances outside of your or your buyer’s control. These circumstances usually include war, terrorism, riots, and actions by (local) governments, such as changes in export or import regulations that affect the outcome of the transaction. Some policies also include natural disasters as a cause of loss under this heading. There may be a risk that money cannot be transferred from one country to another due to measures taken in the country where your buyer is based. This is also considered a political risk. Failure to pay by a public buyer is always considered a political risk.