Political Violence

Political violence coverage compensates for property and income losses caused by violence undertaken for political purposes. Declared or undeclared war, hostile actions by national or international forces, civil war, revolution, insurrection, and civil strife, including politically motivated terrorism and sabotage, are all examples of political violence covered by OPIC. Actions undertaken primarily to achieve labor or student objectives are not covered.

OPIC pays compensation for two types of losses: damage to tangible assets, and business income loss caused by damage to tangible assets. An investor may purchase one or both coverages.

Assets Coverage

Assets coverage compensates for loss of or damage to tangible property caused by political violence. Compensation is based on the investor’s share of the adjusted cost of the property or replacement cost. Adjusted cost is defined as the least of the original cost of the item, the fair market value at the time of loss, or the cost to repair the item. OPIC may pay replacement cost up to twice the original cost of the lost or damaged property, provided the property is actually replaced within three years.

Business Income Coverage

Business income coverage protects the investor’s share of income losses resulting from damage to, or loss of, the use of the assets of the foreign enterprise caused by political violence. In addition, OPIC can provide coverage for evacuation expenses and income losses if the political violence causes the evacuation or temporary abandonment of operations of a project. With an “off-site” rider, OPIC also may compensate for income losses resulting from damage to specific sites outside the insured facility, such as a critical railway spur, power station, or supplier.

Compensation is based on what the project would have realized in net income but for the damage or loss of use of the assets, plus the investor’s share of the project’s continuing, normal operating expenses that must be paid during the time the damage is being repaired. OPIC will also pay for expenses that reduce the business income loss, such as renting a temporary facility. Compensation is paid for the period until productive capacity can reasonably be restored, not to exceed one year.