Bomb attacks have pushed the risk factor for companies operating in India and the Middle East into the red.
The blasts in Mumbai were typical of the risks to companies in India, Aon says
The world's second biggest insurance broker, Aon, said in a report that India tops the list of places judged to be the most dangerous to do business.
In Aon's Global Terrorism Risk Map, Iraq takes fifth place following the recent increase in kidnappings.
Out of the top ten in 2003, Iraq is now poised to overtake Kashmir as the riskiest place on the planet, Aon says.
The research by the company's counter-terrorism and political risk staff suggested that India was one of the "forgotten stories" in the danger list, suffering more attacks between February 2003 and February 2004 than anywhere else.
Even so, the country's burgeoning hi-tech sector is sucking in outsourcing jobs from other countries, with many British firms sending services such as call centres to the sub-continent.
Firms such as Lloyds TSB, HSBC, Aviva and Prudential all have thousands of employees in India working in back-office computing and call-centre operations.
Iraq, Colombia and Saudi Arabia are where most companies think there is the highest risk of attack, Aon's research suggested.
India is in the top five of places where companies most want risk insurance, said Aon's Director of Counter-Terrorism and Political Risk, Paul Bassett.
But the demand tends to be against political problems, such as factories being confiscated or contracts being torn up by federal governments.
As well as that, companies should be thinking about insurance against bomb blasts - like the one which hit HSBC in Istanbul in 2003.
"A lot of British companies are outsourcing to India, particularly call centres," Mr Bassett told BBC News Online.
"We're advising contingency plans in case that call centre comes under attack."
To lower the risk companies are being advised to not only increase security, which means making allowances for such in budgets, but also reconsidering their choice of locations.
The other defence, said Aon, is not to display prominent company logos and to set up in quiet suburban locations.