What is an investment guarantee?

Investment warranty is a special provision to protect investors from invoking losses as a result of an investment opportunity that carries a high degree of risk. The warranty of this type is not available for all types of investment, but is relatively common in terms of real estate and construction projects. The purpose of the investment warranty is to protect the investor's interests in the event that circumstances or events that could not be predicted should occur and are considered beyond the extent of typical and known risk factors. The protection of this nature is sometimes extended through the insurance coverage associated with foreign investments, especially if the investment includes operations in a nation that is currently undergoing a significant political unrest. Real estate in real estate may be included on the basis of the expected assessment of the value of the relevant real estate and the intended use for these properties. The warranty often provides compensation if any type of natural disaster prevents the development of real estateAccording to the investor's plans, or if unforeseen factors appear that negatively affect the value of the soil itself.

Investment warranty also provides a certain level of protection for a company that decides to open production facilities in a nation where political conditions are currently stable, but could change in the next few years. In this scenario, the company could most likely obtain coverage, which guaranteed the restoration of the original investment in the facility, and at least part of the expected revenues associated with efforts. In situations where shelvestical conditions are already somewhat unstable, coverage can cover the initial investment, but does not allow any type of compensation for loss of revenues.

obtaining an investment guarantee is often a costly enterprise. This is especially true if the guarantor has a reason to believe that the degree of risk involved is over what he considers acceptable. In exchange for taking overThe risks will often require high premiums, even if the coverage range is limited to the original investment. Companies usually do not take these costs unless the investment is significant and the chance of something that threatens that the investment is higher than the investor willing to assume. Although it is expensive, the warranty can easily pay for itself if the value of the investment is undermined or the opportunity to get a return is destroyed.