investment guarantee

This has been an exciting year for MIGA, in part because the agency has introduced changes to its policies and operational regulations enabling it to provide new and innovative types of coverage. 

One such cover which is particularly relevant in today’s market is MIGA’s new temporary business interruption (TBI), a product offered as a subset of MIGA’s traditional war and civil disturbance coverage. TBI covers equity investors against losses arising from a war, civil disturbance, or terrorism event in the host country that causes a temporary shutdown due to asset damage, forced abandonment, or loss of use. Unlike the traditional cover which requires a total abandonment and “walk-away” by the investor, TBI enables investors to shut down for as little as 30 days and for up to a year while still maintaining a financially viable and even profitable operation. The key to this cover is the unique compensation structure, which goes beyond coverage of damage to assets to actually cover a company’s lost income during the period of shutdown. Compensation extends to continuing expenses, such as payroll and debt service; includes those extraordinary expenses required to resume operations more expeditiously, such as relocating the project to a safer area or renting replacement equipment; and perhaps most importantly covers the actual lost income, including the company’s profits based on historical earnings.