Marsh has launched its innovative Mobile Asset and Commodity Expropriation (MACE) insurance facility, which, it said will “meet the increased concern of multinational companies about the rise in political risks globally.”
The product provides up to $100 million of cover per risk for plant, equipment and inventories located in foreign countries and territorial waters or while in transit between sites.
Julian Macey-Dare, International Head of Marsh’s Political Risks and Structured Credit business noted: “The Global recession, credit crisis, increased terrorist activity and political unrest have created a more complex risk landscape for companies investing, manufacturing and trading overseas. Combined with a lack of liquidity and lending constraints, companies now have much higher levels of risk on their balance sheets.
“As companies seek to strengthen their resilience, they are more acutely aware of the catastrophic effect that political risk losses can have on their assets and earnings. This product will help companies pursue growth opportunities in emerging markets with greater confidence.”
Marsh pointed out that the new facility “offers protection against abandonment, deprivation, expropriation, riot, strike, civil commotion, sabotage, terrorism, malicious damage, war and civil war, revolution, rebellion, insurrection and hostile act by a belligerent power. It can also be extended to cover third party blockade or quarantine and business interruption covering gross profit, revenue, gross earnings, loss of rental income, extra expenses and increased costs of working.”
In addition it has “no minimum premium requirement and has non-cancellable policy terms of up to three years. The facility is placed in Lloyd’s and the company market, co-led by two Lloyd’s syndicates that each have financial security of A+ (S&P) and A (AM Best). Cover can be bought across a portfolio of assets, on a country-by-country or location-specific basis and can also be assigned to lenders.”
Chris Parker, Head of Bowring Marsh’s Terrorism and Political Violence team, added: “Some buyers of terrorism insurance found themselves without cover following the civil disturbances in Thailand earlier this year because of a dispute over how to classify the events. Marsh’s new MACE facility covers the broadest range of perils, removing any uncertainty that can be caused over the classification of an event in an emerging market.”
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