Export credit insurance
Cover for an exporter whose overseas buyer does not pay, whether because of the buyer's insolvency or default, or because of a political or payment event in the buyer's country.
What it covers
Cover varies between insurers and plans. The policy wording is what decides whether a claim is payable, so read it before you buy.
- Non-payment by an overseas buyer because of insolvency or protracted default
- The buyer's refusal to accept goods that comply with the contract, where the policy provides
- Political risks such as a payment moratorium, delay in transferring foreign exchange, war or civil disturbance
- New import restrictions, or cancellation of an import licence
- Loss before shipment, where pre-shipment cover is taken
- An agreed share of the insured invoice value, within the limit approved for that buyer
Key features
- Covers commercial risk on the buyer and political risk on the country, which a domestic credit policy does not address
- Available from ECGC, the government export credit insurer in India, and from private insurers
- Policies for the whole turnover, for a single buyer, or for a specific contract
- Each buyer is given an approved credit limit; shipments beyond it are not insured
- The insured percentage is less than the full invoice, so the exporter retains a share
- The policy can be assigned, and insured receivables are often viewed more favourably by banks
How to buy it
Four steps, with an advisor you can reach at any of them.
Tell us about the risk
Tell us your export turnover, your markets and buyers, the credit terms you offer, and your payment experience so far.
Underwriting details
An advisor collects the information insurers need to price the risk, and flags anything missing.
Compare quotes
We ask our partner insurers to quote, and put the cover, conditions and premium side by side.
Proposal & policy
Pick a quote, complete the proposal form and KYC, and the insurer issues the policy.
Export credit insurance: FAQs
What is ECGC?
Export Credit Guarantee Corporation of India, a government company that provides export credit insurance to exporters and guarantees to the banks that finance them. Private insurers also write export credit cover.
Does it cover a dispute with my buyer?
No. A commercial dispute about quality, quantity or contract terms has to be resolved first. The policy covers insolvency, default and political events, not disagreements.
Does it help me borrow against exports?
Often. Insured and assigned receivables are viewed more favourably by banks, and ECGC also issues guarantees directly to banks for export credit. The facility itself remains the bank's decision.
Is pre-shipment risk covered?
It can be. Cover can start before shipment, so work already done on a specific order is protected if the contract is frustrated. It has to be arranged as part of the policy, not afterwards.