Beazley American companies fear political risks this election year

With the United States’ elections this fall, 65% of North Americans fear this election year will impact their ability to trade internationally.

So says Beazley Snapshot of geopolitical risks 2024 report, which surveyed more than 3,500 global business leaders and insurance buyers. According to the report, 32% of US business leaders say political risk is their biggest business threat this year, and 25% of North Americans cite war and terrorism as their biggest threat.

Events that followed the 2020 election, including the Capitol Hill riot in January 2021 and the Black Lives Matter (BLM) demonstrations that followed the murder of George Floyd and the death of Breonna Taylor in 2020, are widely believed to be companies still at the top of the agenda. the report.

Beazley quotes the Armed Conflict Location and Event Data Project (ACLED) which actively collects data on reported global political violence and protests, and ACLED’s data coverage shows that more than 11,000 BLM demonstrations were held in nearly 3,000 locations across the US. Of these events, 94% were peaceful and 6% involved reports of violence including property damage and business interruption.

Research from the Texas Politics Project cited in the report shows that American voters expect this year elections that would lead to even more violence. Any business can be vulnerable to damage from civil unrest, and Beazley said the instability of the U.S. political climate highlights the role insurance can play for companies seeking protection against such risks.

“History serves as a useful guide and can help our clients identify whether they may be victims of political violence this year. Previously, we have seen businesses located close to government assets hit by riots and political violence. While that is not the case because they are the targets of the protesters’ anger, they are often dragged down by collateral damage. For these companies, having the right insurance is critical to surviving in the current geopolitical climate,” said Lucy Straker, focus group leader of political violence and lethal weapons protection at the organization. Beazley, in the report.

Of those surveyed, 29% estimate the damage caused by political violence to be high before 2025, and 25% say they are not prepared for this risk. Most (70%) of global business leaders are concerned that the outcomes of numerous upcoming global elections will impact international operations and the ability to trade. The report highlights that for businesses in regions with a polarized political environment, choosing standalone insurance against strikes, riots and civil unrest should be a priority – and that it is essential to get the right cover.

Specialist insurance that covers damage from political violence is becoming increasingly important for those at risk, as companies move away from terrorism cover and towards a wider range of protection against other types of dangers. However, the report notes that it will be more difficult and expensive to purchase adequate coverage the later companies wait. They will also need to demonstrate proactive risk management to providers, according to the Beazley report.

“While we can prepare a list of high-risk elections in advance, we will only know what impact an election will have from the perspective of political violence. While polarization is a good indicator of the likelihood of strikes, riots and civil unrest, unpredictability is an inherent feature of political violence. That’s why businesses need to take precautions well in advance to protect themselves, whether it’s physical measures or seeking insurance coverage,” said Alex Hill, Beazley’s politics and policy focus group leader. terrorism claims, in the report.

Beazley explains that specialty insurance, which previously was more of an afterthought, is increasingly about risk mitigation. This coverage provides companies with financial security that limits risk and enables continued investment and innovation in the midst of such politically violent events.