Political risk rates for contractors working in Iraq have increased by 25% following the killing of four US civilians who were working in the country.

The four American contractors were attacked and killed in Falluja earlier this month. Their bodies were later burned and mutilated.

"Cover for people has increased by 25%," one Lloyd's broker said this week. "There have been no inquiries about assets yet but I would expect similar increases."

Last month, Lloyd's managing agents providing cover in Iraq were warned that terrorist attacks against 'soft' targets in Baghdad will accelerate in the build-up to the handover of power in June.

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