Most times, in the context of international commercial relations between the two partners it is agreed on timely payment for goods/services covered by the contract, thus giving the supplier a customer’s trade credit. This practice undertakes the supplier/service provider assume the risk of not charging the contract value if the external client does not pay on the agreed date in the contract or enter into insolvency.
What are the covered risks?
The non-payment risk in case the foreign buyer does not pay the value of the deliveries, as settled in the commercial contract. The covered risks are both commercial and political, pre and post delivery.
What is the insured percentage?
Usually, our company provides the coverage for 80% of the limit granted to a buyer, meaning the value of the receivables that the supplier has to cash from his foreign client.
What is the insurance period?
The insurance against risk of non-payment on the foreign market can be signed for a maximum period of 360 days.
Types of insurance products for the risk on non-payment on the foreign market (foreign credit)
EximAsig’s products provide financial protection against non payment risk deriving from international commercial relations. These include protection against insolvency of the foreign buyer, payment delays, political events that could prevent the fulfillment of the commercial obligations as settled in the contract.
The insurance policy can be issued:
- for the export turnover, that covers the risk of non-payment for all the foreign clients of the Insured;
- for a certain area, that covers the non-payment risk that some clients, from different geograpfhical areas are exposed to;
- for covering the political risk, that could prevent the foreign client from fulfilling his contractual obligations, as an extension of the initial policy;
- for pre- and post-delivery, as an extension of the initial policy, covering the supplier for the risks that he can be exposed to, from the written admitance of the order, until its delivery.
We can also add the domestic turnover of the client in the insurance policy against the risk of non-payment.
What are the costs of the insurance policy?
The insurance premium is calculated based on the insured amount, the number of clients for which the insurance is requested and also their reliability, the payment method of the insurance premium (fully or instalments), the history of the company and the country risk for the Insured’s clients.