Types of Insurance policies covered by Credit Guarantee Insurance Companies
In 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.