Specific Shipment Policy-Short Term (SSP-ST)

These policies can be availed of by exporters who do not hold our standard policy or by exporter having standard policy, in respect of shipments permitted to be excluded from the purview of the standard policy. Exporter can pick and choose the Contract/Shipment to be covered and indicate the type of cover required.

Period of the policy:

The policy would be valid for shipment(s) made from the date issue of the policy up to last date allowed under the relevant contract for shipment

Risks Covered

• Commercial Risks
• Political Risks
• LC Opening Bank Risks

Percentage of Cover: 80%

Important Obligations of the Exporter
• Upfront Premium payment.
• Statement of shipment(s) made.
• Payment Advice ship
• Statements of overdue
• Filing of claims within 12 months from due date
• Sharing of recovery

Highlights

• Selection for insurance cover
• Other export not to be declared
• “Add on” Marine Insurance Cover
• Premium rate reduced proportionately on higher share loss to exporter

Buyer Exposure Policy :

The Buyer Exposure Policy is to insure the exporters having large number of shipment(s) with simplified procedure and rationalized premium. An exporter can choose to obtain exposure based cover on a selected buyer.
The cover would be against Commercial and political risks. The option to exclude LC Shipment is available. If the exporter has opted for commercial and political risks cover, failure of LC opening bank with World Rank up to 25000 as per latest Bankers Almanac is available. If exporter opts for only political risks for LC exporter premium at a less rate is offered.

Period of the policy: 12 months

Risks Covered

• Buyers Risks
• LC Opening Bank Risks
• Political Risks

Percentage of Cover:
90% for Standard policyholders and 80% for others

Important Obligations of the Exporter
• Premium payable in advance
• Option to pay the premium quarterly in advance is available
• Premium non refundable
• Obtaining approval for extension in due date beyond 180 days
• Declaration of overdue payments
• Filing of claim within 12 months from due date
• Sharing of recovery

Highlights

• 5% discount in premium, if paid in advance
• Declaration procedure waived
• Exporter to approach only for default and claim
• One policy for one buyer

Multi-Buyer Exposure Policy :

Some exporters export to large number of buyers. The number of shipment(s) made by them is also quite high. In order to meet the needs of such exporters Multi-Buyer exposure Policy is introduced. Cover would be available for exports to the buyers in countries listed under open cover category as long as the buyer is not in “default buyer list” maintained by the Corporation and available on its website www.ecgc.in . If the transaction is on LC terms, failure of the LC opening Bank in respect of exports against LC will also be covered, for banks with World Rank up to 25000 as per latest Banker’s Almanac. Cover in respect of exports to restricted cover countries would not be available under this policy.

Period of the policy: 12 months

Risks Covered

• Buyers Risks
• Political Risks
• LC Opening Bank Risks

Percentage of Cover: 80%

Important Obligations of the Exporter

• Premium payable in advance
• Option to pay the premium quarterly in advance is available
• Premium non refundable
• Obtaining approval for extension in due date beyond 180 days
• Declaration of overdue payments
• Filing of claim within 12 months from due date
• Sharing of recovery

Highlights

• Policy is best suited for exporters who make frequent shipments.
• Reduced premium rates available on conditions.
• 5% reduction on total premium on lump sum payment
• No declaration required
• All buyers in open countries covered on conditions
• Protection up to Aggregate Loss Limit(ALL)(individual buyer up to 10% ALL)

Services Policy :

Services Policies offer protection to Indian firms against payment risks involved in rendering services to foreign parties. A wide range of services like technical or professional services, hiring or leasing can be covered under these policies .The exporters can opt for whole Turnover Services Policy or for Specific Services policy depending on the nature of services provided. The premium rate applicable to standard policy will be applied for whole Turnover Services Policy and Specific Shipment Policy (SSP ST) premium rates will be applied for Specific Services Policy.

Period of the policy: 12/24 months as per the requirements.

Risks Covered

• Commercial Risks on ultimate buyers
• Political Risks
• LC Opening Bank Risks

Percentage of Cover: 90% or 80%

Important Obligations of the Exporter
• Advance deposit of premium in advance to cover premium
• Obtaining credit limit on services receiver
• Monthly statements of actual services provided
• Overdue declaration
• Filing of claim
• Sharing of Recovery

Highlights

• Option to select the type of cover

Software Service Policy :

The software service policy will provide protection to exporters of software and related services where the payments will be received in foreign exchange.

Software Services Exports covered under Software Protects Policy:

• Supply of software products and packages.
• Staffing and programming services
• Both off-shore and on-site development

Risks Covered

• Commercial Risks :
  Default, Insolvency and wrongful repudiation after commencement of services

Political Risks:

1. Transfer delay variation of exchange rate
2. War risk
3. Restrictions arises due to Political situation in India or buyers country
4. Refusal of visa for employees of the exporter
5. Unjustified restraining of personnel of the exporter
6. Increase in any tax or introduction of a new tax payable by the exporter
7. Variation in exchange rate (Losses mentioned at 4 to 7 above will be covered maximum up to 25% of value of export)

Percentage of Cover: 80%

Distinct Characteristics

• Billing mostly on milestones progress report
• Exact due dates not possible
• Losses may be for the work done for which invoices is not raised
• No physical documentation possible
• Specific deficiencies & corrective measures
• No salvage in almost all the cases

Highlights

Authorized agency shall inspect books of account

• Accept the documents without Banks certification
• Contract for a defined period
• Billing pre-determined interval
• Loss including services rendered
• No physical documents for transfer
• Provision for correction in case of omission or deletion
• Option to select the type of cover
  

IT – Enabled Services (Specific Customers) Policy :

IT – enabled Services (Specific Customer) Policy would be given in respect of contracts for rendering service during a defined period with billing on the basis of service rendered during a period say, a week or a month or a quarter.

Polices to be offered: IT – enabled Services (Specific Customer) Policy

Risks Covered

• Commercial Risks :
  >Insolvency of the customer
  >Failure of the customer to make the payment
  >Buyer’s failure to accept the services
  Rendered (Subject to certain conditions)
  
• Bank Risks:
  >Bankruptcy of L/C opening Bank
  >Failure of L/C opening bank to make the payment 
  
•  Political Risks:
  >Imposition of restrictions by the Government of the customer’s country
  >Transfer Delay
  >War, Civil war, revolution or civil disturbances in the customer’s country
  >New import restrictions or cancellation of a valid import license
  >Cancellation by the Govt. of India a legally valid and binding contract between the exporter and the customer
  
  Percentage of Cover: 80%
  
• Distinct Characteristics
  • Contract for a defined period
  • Billing pre-determined interval
  • Loss including services rendered
  • No physical documents for transfer
  • Provision for correction in case of omission or deletion
  

Highlights

• The policy will be offered for contracts, which contain standard terms conditions as per the norms and   practices of the IT-enabled Services export industry
• Right to verify documents by authorized agency 
• Monthly declaration indicating the services rendered , invoices raised and invoices paid to be submitted by the exporter.
• No separate overdue report
  

IT – Enabled Services (Multi Customers) Policy :

IT – enabled Services (Multi Customers) Policy would be given in respect of contracts for rendering service during a defined period with billing on the basis of service rendered during a period say, a week a month or a quarter.

Polices to be offered: IT – enabled Services (Multi Customer) Policy

Risks Covered

• Commercial Risks :
  >Insolvency of the customer
  >Failure of the customer to make the payment
  >Buyer’s failure to accept the services
  Rendered (Subject to certain conditions)
  
• Bank Risks: 
  > Bankruptcy of L/C opening Bank
  >Failure of L/C opening bank to make the payment
  
• Political Risks:
  >Imposition of restrictions by the Government of the customer’s country
  >Transfer Delay
  >War, Civil war, revolution or civil disturbances in the customer’s country
  >New import restrictions or cancellation of a valid import license
  >Cancellation by the Govt. of India a legally valid and binding contract between the exporter and the customer
  
  Percentage of Cover: 80%

Distinct Characteristics

• Contract for a defined period
• Billing pre-determined interval – a week ,a fortnight or a month
• Loss including services rendered
• No physical documents for transfer
• Provision for correction in case of omission or deletion

Highlights

• The policy will be offered for contracts, which contain standard terms conditions as per the norms and practices of the IT-enabled Services export industry
• Right to verify documents by authorized agency
• Monthly declaration indicating the services rendered , invoices raised and invoices paid to be submitted by the exporter.
• No separate overdue report
  

Consignment Exports Policy(Global Entity)

A method Adopted by Indian exporters is consignment exports where goods are shipped of their own branch office overseas ready for sale to overseas buyers, as and when orders are received. Thus separate credit insurances policy is introduced to cover exclusively shipment(S) by the exports to their branches overseas on consignment basis taking into account their special features, providing adequate incentives and simplifying the procedure considerably.

Period of the policy: 12 months

Risks Covered

• Commercial Risks on ultimate buyers
• Political Risks
• Insolvency Risk on the overseas branch on conditions

Percentage of Cover:

• 90% for Standard policyholders and 80% for others

Important Obligations of the Exporter

• Advance deposit of premium in advance on quarterly or monthly basis
• Obtaining credit limit on ultimate buyers beyond discretionary limit
• Quarterly/Monthly statements of actual exports
• Overdue declaration
• Filing of claim
• Sharing of Recovery

Highlights

• Covers only the consignments exports
• Rationalized premium for 360 days
• Automatic cover for ultimate buyers up to discretionary limit
• Commercial risks on agents covered
• Extended period for realization up to 360 days

Consignment Exports Policy (Stockholding Agent)

Economic liberalization and gradual removal of International barriers for trade and commerce are opening up various new avenues of export opportunities to Indian exporters of quality goods. A method increasingly adopted by Indian exporters is consignment exports where goods are shipped and held in stock overseas ready for sale of overseas buyers, as and when orders are received. Thus separate credit insurances policy is introduced to cover exclusively shipment(S) on consignment basis taking into account their special features, providing adequate incentives and simplifying the procedure considerably.

Period of the policy: 12 months

Risks Covered

• Commercial Risks on stockholding agent and/or ultimate buyer
• Political Risks
Percentage of Cover:
• 90% for Standard policyholders and 80% for others

Important Obligations of the Exporter

• Advance deposit of premium in advance on quarterly or monthly basis
• Obtaining credit limit on ultimate buyers beyond discretionary limit
• Quarterly/Monthly statements of actual exports
• Overdue declaration
• Filing claim
• Sharing of Recovery

Highlights

• Covers only the consignments exports
• Rationalized premium for 360 days
• Automatic cover for ultimate buyers up to discretionary limit
• Commercial risks on agents covered
• Extended period for realization up to 360 days

Factoring Services:

Factoring is a tailor made package of services designed to secure finance, collection of receivables, credit protection and improve the exporter’s cash flow. The improved cash flow helps the exporter to increase the sales turnover and with increase in volume of business each higher profit. This in turn will help the product seller to be competitive in the market.

Features of the scheme:

• Pre finance for the approved export bills receivables.
• 100% credit risk protection
• Sales ledger maintenance
• Constant follow up with the buyer for collection in a professional way saving time, cost and ensuring realization of payment immediately after due date.
An exporter with good track record dealing on DA/Open Account terms with his buyers is eligible to avail this scheme.
This service is meant for fast growing companies achieving the anticipated export sales in shorter span of time than the projected period. These companies encounter shortage of working capital requirements and the scheme would be beneficial to such customers.



Factoring Costs

The exporter has to remit the charges for setting up of factoring facility, for fixing of credit limit on overseas buyers and for the actual factoring cost per transaction besides cost of finance.

Exporter’s obligation
• Submit the application for the facility
• Inform the buyer about signing the factoring agreement with ECGC.
• Submit the original documents drawn on the buyer to ECGC for pre financing
• Inform all the developments regarding the shipments covered until realization of relevant payments 
 

Export Credit Insurance Cover for Banks:

• Packing credit Guarantee
  To enable banks to provide pre shipment advances to exporters for the manufacture, processing, purchasing or packing of goods meant for export against a firm order.
• Export Production Finance Guarantee
  To enable banks to sanction advances at the pre-shipment stage to the full extent of cost of production when it exceeds the f.o.b values of the contract /order ,the difference representing incentives receivable.
• Post-Shipment Credit Guarantee
  To enable banks to extend post-shipment finance to exporters through purchase, negotiation or discount of export bills or advances against such bills.
• Export Finance Guarantee
  Covers post-shipment advances granted by banks to exporters against export incentive receivable in the form of cash assistance, duty drawback, etc
• Export Performance Guarantee
  Counter-guarantee to protect a bank against losses that it may suffer on account of guarantees given by it on behalf of exporters.
• Export Finance (Overseas Lending)Guarantee
  To protect a bank financing an overseas project by providing a foreign currency loan to the contractor from the risk of non payment.
  

Special Schemes:

• Transfer Guarantee
  To safeguard banks in India against losses on account of failure of a foreign bank to reimburse it with the amount paid to an exporter, when the Indian bank has added confirmation to a letter of credit opened by the foreign bank.
• Overseas Investment Insurance
  To cover the risks on account of war, expropriation or restriction on remittances to Indian investments made by way of equity capital or untied loan for the purpose of setting up or expansion of overseas projects.
• Exchange Fluctuations Risk Cover
  To provide protection from exchange rate fluctuation to exporters of capital goods, civil engineering contractors and consultants who have to receive payments over a period of years of their exports , construction works or services.
• Construction Works Policy
  To provide cover to an Indian Contractor who executes a civil construction job abroad.
• Specific Policy for Supply Contract
  To cover risks in respect of export of capital goods or turnkey projects involving medium / long term credit.
• Insurance cover for Buyer’s Credit and Line of credit
  To cover risks in respect of credit extended by a bank in Indian to overseas buyer for paying for machinery and equipments to be imported from India or credit extended by a bank in India to an overseas institution for facilitating imports from India.