Lloyd's insurer MAP Underwriting has responded to the rising tension in the Middle East by developing a policy that protects companies against the effects of war and other political violence on their investments, property and personnel.

The policy combines a number of covers that would normally be excluded from standard insurance – especially those losses arising from acts of war.

Companies' immediate interest has focused on risks in the Middle East, but this insurance will be equally sought after in other areas of unrest, including the Balkans, parts of South East Asia, and Southern Africa.

Where the cause of loss is war, riot, terrorism or civil unrest, cover is offered for loss of physical assets, loss of equity due to abandonment, repatriation costs for expatriate employees and their families and belongings, and for personal accident.

Extensions are available for a company's liability for injury (including employee injury) as a result of war and terrorism, and even fixed compensation redundancy insurance for employees, following abandonment of operations.

Buyers of the policy can pick any or all of the individual coverages, which can be priced separately if required. Ben Garston, political risk underwriter at MAP, expected that capacity would reach $300m (£212m) per risk.

“It is clear that Israel has great economic potential, but investors are understandably worried about the political situation,” he added.

“This policy is intended to take away much of that political uncertainty, and so enable businessmen to concentrate on more mainstream commercial considerations.”

“Many of our clients are keen to open up new markets in the Middle East,” said Aon's John Minor, a US-based political risk broker.

“MAP's new war policy… should facilitate investment in this and other volatile regions.”