Between 40 and 45 per cent of the world's identified lithium resources are concentrated in Chile, Argentina, and Bolivia, according to the US Geological Survey's 2026 Mineral Commodity Summaries. A new WTW report argues that the disruptions most likely to cause financial loss across this region are not the ones standard insurance programmes are built to cover.
The research, conducted through the Willis Research Network with Cullen Hendrix, senior fellow at the Peterson Institute for International Economics, tests three disruption scenarios across the Lithium Triangle. Each is designed to examine how a local event propagates into operational, financial, and insurance exposure. The scenarios cover a high-altitude earthquake in Bolivia and Argentina, an extraordinary export levy in Argentina, and an automation-driven port strike in Chile.
Across all three, physical damage to assets is rarely the primary driver of financial loss. Losses arise more often through operating restrictions, government-imposed access controls, labour action, fiscal intervention, foreign-exchange constraints, delayed settlement, and non-payment. These mechanisms do not always trigger standard property or business interruption coverage. In some cases they may not trigger any coverage at all, unless specific political risk, trade credit, or non-damage wording has been arranged in advance.
The earthquake scenario tests how a seismic event in a high-altitude lithium basin escalates beyond physical damage. Water contamination concerns, community protest, and government-imposed operating restrictions follow. Freight delays build through Chilean port corridors as cross-border diplomatic pressure mounts. The financial impact - deferred revenue, trapped cash, contract penalties, restricted capital movement - may in some cases exceed the cost of the physical damage itself.
The export levy scenario focuses on Argentina, where a federal levy imposed during a balance-of-payments crisis triggers corridor blockades, security incidents, and foreign-exchange restrictions. An export levy or capital control will not normally trigger standard property or business interruption coverage. Recovery depends on whether specialist political risk, currency inconvertibility, or contract frustration wording has been arranged - and whether that wording responds to the specific government action involved.
The port strike scenario examines an automation-driven labour dispute at Antofagasta, the principal Chilean export node for regional lithium flows. A localised strike spreading to Valparaíso and San Antonio shows how a single concentrated logistics chokepoint generates losses through delay and throughput reduction rather than physical damage. A labour dispute or lawful strike may not, by itself, trigger standard property or business interruption coverage.
The core question the WTW analysis poses for risk managers is whether current insurance arrangements would respond if any of these disruptions occurred. The report identifies five coverage areas that may require review: political risk structures, where government action affects asset use or project continuity; political violence and related business interruption, where protests or security responses restrict access; contract frustration, where fiscal or foreign-exchange measures affect delivery obligations; denial of access and non-damage disruption, where assets remain intact but are inaccessible; and supply chain and contingent business interruption, where upstream disruption at a port or dependent-property location affects downstream operations.
The report recommends reviewing insurance arrangements as an integrated programme rather than as separate policies. Clauses, exclusions, waiting periods, and sublimits should be tested against a compound disruption event rather than a single-cause loss.
One of the report's central points is that Lithium Triangle exposure does not require direct involvement in mining or extraction. Organisations with supply chain dependencies, counterparty exposure, or financing structures linked to the region face material disruption risk without needing a clear trigger within their own operations. Battery manufacturers, EV producers, electronics companies, and project financiers all carry exposure through the upstream lithium supply chain - and the insurance programme review the report recommends applies to those indirect positions as much as to direct operational assets in the region.
Rupert Mackenzie, head of natural resources at WTW, said organisations are exposed not only where they operate but also through supply chains, logistics corridors, and financing structures. "Leaders need to understand where that exposure sits before disruption occurs, and where resilience, risk retention, or insurance can make the greatest difference," Mackenzie said.
