W.R. Berkley Corp. is launching political risk insurance for life sciences companies, a type of product that has become increasingly popular in uncertain times.
The insurer plans to offer the coverage through its Berkley Life Sciences operating unit, and it will be targeted life sciences companies that have overseas operations or assets. While traditional political risk insurance is available in some cases, Berkley said that specialized coverage will be designed to address the unique risks life sciences companies face, particularly with highly regulated overseas business operations.
Jill Wadlund, president of Berkley Life Sciences, asserted that the life sciences -specific political risk coverage is not yet addressed by the broader insurance market.
“This new coverage fills an unmet need for life sciences firms concerned with political volatility,’ Wadlund said in prepared remarks.
Berkley plans to build traditional political risk protection (think coverage for confiscation and political violence) into the policy. Underwriters will add elements unique to life science company needs, including perils of delayed access and wastage of perishable material.
How those two added elements will work:
- Delayed access coverage works when a foreign government action stops a company from meeting delivery requirements or meeting contractual obligations.
- Wastage coverage kicks in when action by a government official such as a customs official leaves a product to expire or succumb to damage by government agents.
Political risk insurance has gained in popularity very quickly. As of June 2015, capacity for the coverage surpassed $2 billon for a single policy, according to Marsh, and that was nearly double the number in 2009.
Beyond Berkley, Ironshore International is among insurers who have launched political risk coverage targeted to specific niche customer bases. Ironshore’s new product, unveiled earlier in June, targets film producers on location in volatile parts of the world.
Aspen, Zurich and Markel Corp. are also among insurers who have been beefing up their political risk underwriting staffs.
Source: Berkley Life Sciences/W.R. Berkley Co.