Arab Spring (2011) in political violence insurance
Wave of uprisings that started in Tunisia in late 2010 and tested both political violence policies and political risk contracts, above all on Libyan construction sites.
Mohamed Bouazizi set himself on fire on December 17, 2010 in Sidi Bouzid; Ben Ali left Tunisia on January 14, 2011, Mubarak resigned on February 11, Libya slid into war from mid-February, Syria from March. For the London market, the sequence raised the question many wordings left vague: at what point does a riot become an insurrection, then a civil war? The answer decides who pays. An SRCC extension attached to a property policy covers riot and excludes insurrection and war; a full political violence policy covers the whole ladder, civil war included. In Egypt, the January looting was mostly settled as riot. In Libya, the collapse of the state produced a different kind of claim. Turkish, Chinese, Korean and European construction contractors evacuated their crews, left sites and equipment behind; those that had bought political risk cover then claimed from their insurers for contract frustration, confiscation or forced abandonment, with waiting periods running and close arguments over the real cause of the work stoppage. Underwriters then raised political violence rates across the region, cut their capacity on Libya and Syria, and it became more common for the questionnaire to ask for the staff evacuation plan and the value of equipment left on site.
In February and March 2011, tens of thousands of foreign workers were evacuated from Libya. Construction firms operating there filed contract frustration and forced abandonment claims with insurers in the private political risk market.
- UN Security Council, resolution 1973 of 17 March 2011 (Libya)
Arab Spring, Arab uprisings 2011, Libya 2011 claims
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