Do you need political risk insurance? How to insure your business amid uncertainty

Running a business is complicated—particularly in times of geopolitical and economic uncertainty.

The first few months of 2026 have seen several unexpected events, including an escalating war in the Middle East that has caused gas prices to spike and led to increased concern of cyber attacks.

Political risk insurance briefly came into the spotlight earlier this month when President Donald Trump ordered the U.S. to provide this type of coverage to shipping lines that traversed the Gulf of Hormuz.

Political risk insurance isn't limited to this scenario — many businesses could benefit from this kind of insurance coverage. However, it's also not the right fit for everyone.

Here's what you need to know about different types of business insurance coverage that could help right now.

According to the National Association of Insurance Commissioners (NAIC), political risk insurance protects business from the risk of foreign government actions, including the blockage of importing or exporting goods, political violence and physical damage of assets overseas, and the ability to convert currency.

"If you're operating in a foreign territory, political risk insurance can be very helpful to make sure that you can repatriate the money you're getting there, make sure that you're protected around contract certainty in that country, that your your assets there are looked after, and you have recourse should something occur," says Thaddeus Woosley, executive vice president and head of national practice groups for New Jersey-based insurance brokerage World Insurance Associates.

However, it's not just multinational firms that need this kind of coverage. "The biggest thing that we're asking customers right now is: 'What does your supply chain look like?'" he says.

"Maybe you're sourcing parts from somebody with operations in a foreign territory, or maybe you're building something that goes into something else and upstream, the only people that want your part are based somewhere else," he says. "If they're impacted, then you're going to be impacted."

In a global economy, even smaller firms can see effects from events that happen thousands of miles away.

To buy political risk insurance, you'll want to work with a broker. This person can help you compare policies from many insurers and help you narrow down exactly what coverage you need and how much. Since these tend to be multi-year contracts, getting a policy tailored to your business is essential. While the costs of this kind of coverage vary by need and industry, the NAIC notes that you can expect to pay about 1% of the policy's limits per year in premiums.

Business insurance needs can vary widely across industries. To narrow down what would be most helpful for your business, Woosley suggests getting an understanding of all the parts of your business like you would for political risk insurance.

"Where do you get the stuff that you're selling, or that you use to make the stuff that you're selling? What happens if that goes kaput one day?" Woosley asks. "What's the potential to find a different source? And, is that cost going to be in line with what you pay now? Or is it going to be more or less? What's the downtime created with not being able to source that product?"

Once you know what your potential risks are, you can dive into types of insurance that might cover them.

Business interruption insurance can be useful for some businesses. This type of coverage reimburses small businesses for lost revenue the business would have made after a covered event like a fire renders the property unusable. Business interruption insurance is typically a part of a business owners' policy (BOP), which also covers the business's property and liability.

Many companies offer business owners policies that are quick and easy to obtain, including Next, which offers a fully online experience and works in a variety of industries. We've also previously called out Chubb as a top pick for business owners' policies, as the brand offers coverage for companies with up to $30 million per year in revenue.

When and how to get cyber insurance

Additionally, Woosley adds that cyber insurance has become a key consideration in today's environment.

According to a February 2026 report from cybersecurity and compliance platform Vikingcloud, 75% of small business owners said that cyber-related issues, including cyberattacks, data breaches and ransomware, were a top threat to their business in 2026, a greater share than the 54% who were concerned about inflation and rising costs. The report also found that 40% of small businesses would be forced out of business by cyber damages of $100,000 or less.

"Don't rely on cyber events to be covered in your property policy," Woosley says, noting that standard BOPs don't include coverage for this. "You need a standalone cyber policy."

Cyber risk management coverage is available from several top insurers, and you can typically bundle cyber insurance policies with a BOP for simple management. Hiscox offers this kind of coverage with a 5% discount for bundling with a BOP. Other policies, like Travelers CyberRisk, are standalone, making them a better fit for mixing-and-matching coverage to meet specific needs.

"If you're a small company thinking, 'Well, I don't really need a cyber policy, that's for the big, global, intricate organizations,' that is completely wrong," Woosley says. "Everybody should have a standalone cyber policy, especially when the world gets to be more topsy-turvy and these events tend to take off."

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Thaddeus Woosley, executive vice president and head of national practice groups for World Insurance Associates.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed financial decisions. Every business insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. To research the best insurance companies, we compiled over 100 data points on more than a dozen insurance companies. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and X to stay up to date.