Types of Insurance policies covered by Credit Guarantee Insurance Companies.

The information provided here is part of Guide on howtoexport and import 

Types of Insurance policies covered by Credit Guarantee Insurance Companies 

Risks and solutions in export business copyIn this article, I am going to explain about four types of risk cover policies of Insurance companies who covers the risks of overseas buyers. These categories could be varied from one service provider to another one. I mention these categories to let you know a brief idea about the credit risks covers. You may contact the service provider at your country to know accurate information about their service to cover credit risks under international business.

4 Categories of risk cover policies

In this article, I would like to explain about major 4 categories of risk Kindly note, this article is only an introduction about risk covering insurance companies and its functions in simple language to make you easily understand. You may contact official website of such credit guarantee companies to know more.

The main types of insurance covers are standard policies, specific policies, financial guarantee and special schemes.

Standard Policies: They are ideally suitable to exporters to cover payment risks involved in export on short- term credit basis.

Specific Policies: These policies are specifically designed to protect Indian exporters from the risks involved in Export on deferred payment contracts, Services rendered to foreign parties and Construction works and turnkey projects undertaken abroad.

Special policies, beside the risks covered under Standard policies, are issued to meet the specific requirements of export transactions.

Financial Guarantee: They are the policies issued to banks for covering risks in extending credit at pre-shipment as well as post shipment stages.

Special Schemes: They are meant to cover risks involved in confirmation to letter of credit opened by foreign banks, insurance cover of Buyers Credit, Line of Credit and exchange fluctuations risks.

In this article, we have discussed about different common categories of risks covered by various credit guarantee companies. Would you like to add more categories under risk cover policies offered by other agencies? Share your experience with credit risk covering service providers to let others aware.

Commercial risks and solutions under Export Business       Political risks in International Trade    Risks arising out of foreign laws in Import Export Business    Cargo risks under Imports and Exports  Causes influencing price of export goods in Export Trade    Credit risks and solutions under International Business   Foreign exchange fluctuations risks and solutions in import export Business  How to overcome the credit risk in an export business?    Does exchange rate of currency effect export business?    Marine Insurance policies   Risks and solutions in Export Business 

Comment below your thoughts about various types of credit risk covering polices under import export trade of international business.

4 Standard Policies under Export Credit Guarantee Corporation ECGC.

Now, we can discuss about 4 standard policies under Export Guarantee Corporation ECGC.

Standard Policies under ECGC

Standard Policies under ECGC has designed four types of standard policies for shipment made on short-term credit.

(a) Shipments (Comprehensive Risks) Policy: This covers from commercial political risks from the date of shipment.

(b) Shipments (Political Risks) : This covers from political risks from the date shipment.

(c) Contracts (Comprehensive Risks) Policy : This covers from commercial political risks from the date of contract.

(d) Contracts (Political Risks) Policy : This covers from political risks form the date of contract.

The Shipments (Comprehensive Risks) policy is the one ideally suitable for goods exported on short-term credit basis. This policy covers from commercial and political risks from the date of shipment. Risk of pre-shipment losses on account of frustration of contract are practically nil in respect of export of raw materials, consumer durable or consumer goods as they can be sold easily. Contract policies cover from the date of contract so they are ideally suitable in case goods are to be manufactured to meet the specific requirements of buyers and do not have alternative buyers. Further, the risk of ban on export of goods covered by the contract policy only.

In this article we have discussed about standard policies covered by ECGC to cover credit risks. I hope, you are enjoying reading articles about credit risks and solutions in international business. If you would like to share your experience in handling risks under import export business, you can add below. I personally request you to share your experience also in resolving risks under export import business of international trade.

Comment below your thoughts about standard policies of Export Credit Guarantee Corporation to cover credit risks of clients involve in export business.

The above information is a part of Online export import training guide 

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R.Sampath kumar: Dear Sir, I am planning to import aluminium hardware products like screws,handles,Stainless steel hand rail pipes, handrails fitting I am a beginner. Please give your valuable suggestion to start import from China

Samraat Deol : I came across your helpful site while researching about exports. I'm based in Pune and have recently started an ecommerce site which sells in India and also exports to the US. I wanted to understand the complete cycle of exports starting from when the products are shipped out cleared by customs . Payments received and documents needed to be submitted at bank for compliance.As of now, everyone in the export chain gives different answers and lots of confusion exists. How can you help?

Admin: Hello Samraat Deol, You may read maximum posts in this website about international business online training.

parth pandya : my name is parth pandya and i am completed my education, and now i am thinking that i have to start a export business, i have to export a ceramic tiles to Africa. and procedure of IEC is running but how i am sell a tiles in africa thats i have no idea. and how to export this heavy load from ship, and in beginning how much rupees risk taken, please help me about this question.

Admin: parth pandya, Read as much as posts in this website about complete guidelines to handle import export business in this web blog. You may approach a professional also in this regard.

uday kumar : Today I am reaching you because i have one doubt Regarding Export.We are 100% Export oriented Unit Manufacturing Aero Parts. we are Importing duty free raw materials from other countries after processing Finished goods will be exported to other country.Recently we have exported 100 No Aero parts to Austria, In that customer Rejected 20 Nos. he is agreed to pay amount for 80 No only and Our Management also accepted to received a payment for 80 Nos amount for remaining 20 Nos we have raised the Credit Note. if we import the rejected goods it adds the additional costs like Freight Charges, Insurance Charges, etc. Our Management Decided to Inform the customer to destroy the goods in their country itself. we are 100% Eou Unit Imported Raw Materials are duty Free. Do we need to Import the goods or we can there destroy their itself?

Admin: Hello Uday Kumar, As you know, 100%EOU has their on entity for customs related activities with seperate department. So as per my knowledge, you can arrange to destroy 20nos by obtaining permission from necessary customs authorities/EOU BONDING officer designated to your 100% Export Oriented Unit

SUMAN SAHA: Sir, Your all the articles do not require anything for comment from learners like us. Only thing I want your kind opinion is that being qualified Chartered Accountant I joined POST GRADUATE DIPLOMA IN INTERNATIONAL BUSINESS (PGDIB) from Symbiosis, Pune in Distance mode. At present (More than 1 YEAR) I am looking after the fund and entire accounts incl. taxation of an Export Company. Whether such PGDIB course from Symbiosis will bring growth to my professional career? Looking fro your expert opinion. With thanks and regards, CA.Suman Saha

Admin: SUMAN SAHA, Learning any subject is an asset for anyone's life either for today's profession or for tomorrow's. I hope, you can succeed in your present career with your new study for POST GRADUATE DIPLOMA IN INTERNATIONAL BUSINESS (PGDIB).

Nitesh: Sir, I want to import some PVC Taps from china company offer me FOB price ..after FOB price how much more amount including (shipping charges and Custom duties and Taxes ) From China To India I have to pay ? please help me

Sairaman,Dy.General Manager,ECGC,Chennai: Dear Sir, Your website -How to Ëxport- is useful for new exporters. You are aware that commercial and political risks in an export transaction are covered by ECGC which is a Govt. Of India Enterprise under various types of credit insurance Policies. You can include this in your article as to how to mitigate the commercial and political. With Kind Regards Dy.General Manager & Regional Manager ECGC Ltd., (Formerly Export Credit Guarantee Corporation of India Ltd) 3rd floor, Overseas Towers, L-756, Anna Salai Chennai -600002. Tel No.044-4228 4450 /2854 5080 Mobile: 8879667515 Website:www.ecgc.in

Aneesh: sir, I need to know the best consultant for exporting .because iam a beginner i would like to start a textile exporting

Alkesh Jajoo: I want to export Fruits & Vegetable to Gulf country. But as per market condition, its risky so i am planning to take insurance. Which of the above would you suggest should i take? As i am dealing in Perishable goods.

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