Export Credit Insurance provides protection against the risks of non-payment involved when offering credit terms to your overseas buyers.
The subjects of insured interest under credit insurance and cargo insurance are entirely different. The former subject is “the debt” or “the current assents” whereas the latter is the “goods”, “product” or “merchandise”.
Yes. When your company is engaged in export trading on credit payment terms namely Documents against Payment (D/P), Documents against Acceptance (D/A) and Open Account (O/A), it is exposed to "non-payment" risks. Unforeseeable political, social and commercial factors can also prevent payments from your buyers to your company.
Being insured by export credit insurance, your company is protected against bad debts risks, enabling you to secure by extending more favorable terms to overseas buyers. Your capability in acquiring trade finance is also enhanced.
ECIC protects Hong Kong exporters against non-payment risks arising from commercial and political events.
ECIC is not liable for losses arising from buyer risks in relation to in-house transactions. However, cover can be provided with respect to country risks.
Yes, provided that you have applied for a joint-policy. The procedure is simple. You can send us the request in writing based on the suggested wordings. For details, please contact your account officer.
It is important that you should nominated one of the companies as the Nominated Policyholder and all documents relating to the Policy (such as signing of LA, declaration and lodging of claims) must be signed by the Nominated Policyholder.
Premium rates vary from Policyholder to Policyholder depending on their portfolio of risk, such as buyer, country, length of credit, size of turnover, etc.
We insure all credit terms with usance not more than 180 days. These credit terms broadly include Documents against Payment (DP), Document against Acceptance (DA) and Open Account (OA). We also treat "cash against documents" and "documentary sight draft" as equivalent to DP. So if you make shipments under these terms, please declare the payment terms of these shipments as DP.
We understand that sometimes you will ask your buyer to make T.T. payment (telegraphic transfer) to you after you have made the shipment. This type of payment arrangement is also insurable by us and we treat it as OA. Please declare such shipments to us on OA term of payment."
Except countries under UN sanction, ECIC covers over 200 countries all over the world.
You must apply for a credit limit from us via EC-link or in other formats agreed by us.
Yes, if you are trading with your overseas buyers (except with your associates or subsidiaries) on credit terms.
If no credit limit has been established for the buyer, no claim will become payable in case of a loss incurred even if you have declared the shipments to us.
When your Policy is issued, you must apply for credit limits on all your existing credit buyers.
For new buyers, you should apply when you are seriously contemplating or actually negotiating to do business with them on credit terms. It takes time to collect the necessary credit information on overseas buyers; therefore you must allow us a reasonable time to process your CLA.
ECIC may restrict or refuse cover on a buyer for various reasons and in a varieties of circumstances including but not limited to the situation where information on the buyer is not sufficient; when our commitments on the buyer are full; where there is a winding-up or bankruptcy petition filed against the buyer; or where the trading conditions such as the political or economical stability of the buyer’s country have changed.
We assure you that we always try to decide on credit limit as objectively and pragmatically as we can.
You must lodge your claim by filling in a claim form which will be provided to you. You should give all the details and all supporting documents requested in the claim form. Incomplete documentation can seriously delay the settlement of your claim.
A claim should be submitted within the period specified in the policy.
Generally speaking, claims are paid:
If your amount of loss does not exceed your credit limit, the compensated will be the amount of loss multiplied by the percentage of indemnity.
If your amount of loss exceeds your credit limit, the compensation will be the amount of credit limit multiplied by the percentage of indemnity.
Essentially, a credit insurer needs to be satisfied that:
ECIC undertakes to indemnify up to 90% of the losses.
It depends on the circumstances of the case. Generally speaking, in the case of insolvency, it is important that you promptly register the amount the buyer owes you and other detail with his receiver/liquidator/administrator.
In the case of potential default, we suggest that you send a strongly worded letter to the buyer demanding immediate payment. You may also arrange, through your bank, to have the bills protested against the buyer if circumstances indicates that this action is worthwhile.
In the case of repudiation, you should first arrange proper storage of and insurance for the goods involved. Then you should send a written demand to the buyer to take delivery of and pay for the goods within a certain time limit. If such action fails, you should look for alternative buyer and hold the original buyer responsible for any losses incurred.
You should keep us promptly informed of your actions.