Non-payment by a foreign buyer under an export contract, provided that such late payment resulted from political and commercial disturbances, will be covered by the insurance company.
For example, an exporter wants to sell its goods abroad, and the exporter found a foreign partner. If an export contract provides for an advance payment, letter of credit or a bank guarantee, the exporter has no risk of non-payment under the export contract. However, if the foreign partner requests to sell on the condition of delayed payment, the exporter runs the risk of not receiving payment for the shipped goods.
The “Supplier credit” insurance policy is offered to protect national exporters against the receipt of late payment during the sale of goods.
The insurance policy protects domestic exporters against the risk of non-payment by a foreign buyer due to commercial and political risks, as follows:
- prolonged non-payment;
- war, civil unrest;
- enaction of import embargo in the buyer's country;
- actions of the foreign buyer's government;
- transfer delay.