• Contract ratification reimbursement is a form of political risk insurance that pays a portion of the contractor’s initial costs that may not be reimbursed by the buyer/employer if the overseas contract is not completed for reasons beyond the contractor’s control. Contractors/sellers usually place orders and mobilize the plant on site as soon as a foreign contract is signed. However, if certain conditions are yet to be met at this stage before the contract becomes binding on both parties, the contractor/seller may be liable for all costs incurred in this way if the preconditions are not met and therefore the contract will never be ratified. . The indemnification coverage upon contract ratification is intended to insure this risk.