The growing interrelation of world economies, risk-taking quests for profitability, and the unexpected and unpredictable nature of political change, have intensified the convolution of business and political risk and, with it, the need for political risk cover. As warfare targets trade in energy and other commodities,1 it is necessary to establish realistic criteria for definitions and classifications of cover to create acceptable models of compensation.

In Citgo Petroleum Corp v Ascot Underwriting Ltd for and on behalf of Lloyd’s Syndicate 1414,2 the District Court of the Southern District of New York (District Court) at first instance was confronted with the issue whether the loss of a cargo of oil seized by agents of the Maduro regime in Venezuela was the result of certain “war risks” (specifically, “insurrection”) included in the marine cargo policy. The District Court held that it was, and the Court of Appeal for the Second Circuit (Appeal Court) affirmed.3