Non-payment of goods exported is usually the greatest barrier to international trade. Credit insurance gives protection against losses of non-payment of trade debts raised from a variety of causes include
- insolvency or protracted default in payments (buyer risks)
- inability to transfer currency and payment moratorium for international trade (country risks)
Advantages of “Credit Insurance”
- Effective control of bad debt risks
- Enhanced Credit management services
- A means to obtain more attractive financing
- Expand sales securely in new markets
- Protection of your balance sheet and cash flow
Scope of coverage and indemnity
- Domestic and export sales of goods or services with credit terms up to 180 days.
- 90% of your receivables can be covered in most cases. The maximum amount is determined by the basic rating associated with the buyer’s credit standing.
- Claims for default payment are settled in 2 months or 5 months, depending on the amount of default.
- Full collection services
- Risk and credit management services
Premium Rate is calculated on the basis of the followings
- The volume of insurable turnover
- The spread of risk
- The destination of sales
The Export Credit Insurance Policy is acceptable to major Banks in Hong Kong for the purpose of Invoice Financing or Factoring.