Can expropriation risks be insured?


South Africa is poised for land expropriation without compensation – but what does this mean for domestic insurers?

The challenge facing insurers is that, where there has been expropriation without compensation, the legislation will usually support this and the courts will be unable or unwilling to assist unless the law has been breached by incorrect application. There is then no question of a subrogated recovery under a treaty.

Brokers and insurers must consider expropriation or creeping expropriation risks to South African individuals and companies, and understand that recovery actions through subrogation will probably be unavailable where the expropriation without compensation is legal, say Michael Chronis and Alan Bryson of Norton Rose Fulbright.

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