Overview
EXIM’s exporter based Single Buyer Insurance is designed for companies that do not want to insure their exports to all their eligible foreign buyers, and instead want to insure sales to a single foreign buyer under one policy. The exporter may have multiple single buyer policies covering different foreign buyers. Single Buyer insurance is available to exporters of all sizes.
Use Single Buyer Insurance to:
- Extend credit terms to select foreign customers.
- Insure against nonpayment by an international buyer.
- Cover both commercial (e.g., bankruptcy) and political (e.g., war or the inconvertibility of currency) risks.
- Get pre-shipment coverage for an exporter’s manufacturing costs when named political risk events prevent the export of the goods.
- Arrange financing through a lender by using insured foreign receivables as additional collateral.
Benefits of Single Buyer Insurance:
- Risk Reduction: safeguard against catastrophic losses from buyer nonpayment and certain political risk events that prevent shipment.
- Increased Competitiveness: unlock the ability to offer buyers the credit necessary to expand into new markets and boost sales with existing customers.
- Improved Liquidity: accelerate cash flow by borrowing against foreign receivables.
- Credit Risk Management Expertise: ease the burden of credit risk management by leveraging EXIM's international expertise.
- Flexibility: Select specific foreign customers to insure rather than your whole export portfolio.
How it Works
The nuts and bolts of a policy are simpler than one might imagine.
- Policies cover both commercial and political risks.
- Coverage of 90% for private buyers and 100% for sovereign buyers. Bulk agricultural commodity exports qualify for 98% coverage. Pre-shipment is typically 95%.
- Exporters must insure all their eligible shipments to the buyer unless a waiver to that requirement is granted by EXIM.
- There are no application fees or annual minimum premium. A one-time, refundable advance deposit of $500 for small businesses, and up to $2,000 for non-small businesses is required to issue the policy
- No first loss deductible.
- For pre-shipment, in lieu of the above advance deposit, the exporter pays premium for pre-shipment and post-shipment coverages at the applicable rates based on the amount of the exporter's contract with the buyer. Contact your insurance broker or EXIM Relationship Manager for more details and indicative rates.
- Eligible exporters may request an option to pay all their premium upfront based on their expected shipment volume and receive a non-cancellable policy. With this option the exporter does not have to report and pay for shipments every month - only once when the policy is issued.
- Subject to approval, policy proceeds (claim payments) may be assigned to a financial institution to arrange foreign receivables financing or to add insured foreign accounts receivable to the borrowing base.
