Insurance for exporting and importing
Insuring against non-payment when exporting
While most businesses insure their fixed assets, many overlook the risk of non-payment by the buyer. There may be buyer, country or political reasons for non-payment.
As an exporter, you can take out export credit insurance. This protects against non-payment and is an important tool in credit management. It means you can sell more goods or services on credit terms and increase your borrowing power.
However, it should not replace good credit management practices. Search for a financial export credit insurer with the British Insurance Brokers Association (BIBA).
Export insurance policy
An export insurance policy insures an exporter against the risk of not being paid under an export contract. It may also cover the risk of not being able to recover the costs of performing that contract because of specified reasons.
If you have not been able to purchase an export insurance policy privately, you may be eligible to apply for one to UK Export Finance, if you meet all of the criteria.
UK Export Finance provides an application form for an export insurance policy.
Many buyers abroad ask sellers for bonds or bank guarantees in case the seller doesn't keep to their side of the contract on quality or performance after receiving advance payments.
UK Export Finance offers bond insurance where the exporter, the buyer and the bond meet the criteria.
If your business does not meet the criteria, you can ask a private credit insurer for a quote. Find a financial export credit insurer with the BIBA.
Tender exchange rate indemnity
This insurance will protect you against adverse exchange rate movements when tendering for contracts in a foreign currency. If the currency weakens between submission of your business tendering and winning the contract, you could lose a lot of money.
Some private credit insurers offer this insurance.