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Embargoes, prohibitions of outsourcing (especially when involving communications infrastructure), confiscation or freezing of foreign assets and/or currency, and contract repudiation can likely ensue during panic mode. These are commonly described as Trade Disruption issues. Damage includes closures of ports, airports, power grids, and rail yards as a result of tsunamis, earthquakes, pirates in Somalia, terrorism, revolutions, civil unrest, embargoes, and wars.


Cyber warfare can arguably be added as a Trade Disruption: it is an area of risk not yet grasped by the business world in general. We can fully expect that governments will not act effectively following a perceived cyber war attack. While businesses have witnessed recent communications and internet shutdowns by panicked governments facing civil unrest, we have not yet witnessed an actual full-blown cyber attack on any state. What form a national response to such an attack will take is still unknown. What effects would a full cyber attack have on your business? What effects on overall commerce, national and international??? The answers are equally unknown.


Political Risk Insurance is designed to address Trade Disruption risks from cyber warfare. Common sense avoidance techniques, backup and continuation planning need to be combined with risk transfer for catastrophic occurrences. Identifying what risks are likely and need to be underwritten for coverage is the trick! A comprehensive checklist of perceived exposures to your business must be reviewed for underwriting and pricing. An experienced insurance professional with a technology background is essential to guiding you in determining your exposures to political risk losses as well as avoidance strategies.