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Credit Insurance PPT 1

Trade credit insurance provides coverage for commercial and political risks associated with extending credit to buyers. It insures against insolvency, protracted default, cancellation of import licenses, government moratoriums, and natural disasters. Common risks covered are insolvency and default. Key exclusions include sales exceeding credit limits, sales to individuals or associated companies, and government sales. Claims are typically paid within 5 months for default and 30 days for insolvency if the claim is admitted. Required documents for claims include invoices, purchase orders, delivery receipts, account statements, and correspondence following up for payment. The document provides an overview of trade credit insurance coverage.

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512 views7 pages

Credit Insurance PPT 1

Trade credit insurance provides coverage for commercial and political risks associated with extending credit to buyers. It insures against insolvency, protracted default, cancellation of import licenses, government moratoriums, and natural disasters. Common risks covered are insolvency and default. Key exclusions include sales exceeding credit limits, sales to individuals or associated companies, and government sales. Claims are typically paid within 5 months for default and 30 days for insolvency if the claim is admitted. Required documents for claims include invoices, purchase orders, delivery receipts, account statements, and correspondence following up for payment. The document provides an overview of trade credit insurance coverage.

Uploaded by

vikrant
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 7

Trade Credit Insurance

Origin Insurance Brokers India Private Limited


What’s covered ...

Commercial Risk –
 Insolvency
 Protracted Default (delayed payments)

Political Risk (risk covered only in case of exports)

 Cancellation of Import License,


 Government Moratorium,
 Occurrence of War,
 Natural Disaster
Insolvency and Default are most common!

Page 2
What’s not covered ...
>Amount exceeding credit limit approved
> Sales to Private Individuals (proprietorship and partnerships are covered)
> Sales to an Associated Company (Direct or Indirect)
> Government Departments for Domestic Sales
> Sales on L/C, BG – since they are secure sales
> Failure on part of the seller to fulfill terms and conditions of the contract
> 85% is the indemnity , 15% is the risk of policy holder
> Amount exceeding DCL, if limit not taken
> Interest and penalties
> Currency fluctuation in case of exports
> Shipments made after cancellation of limits
> Arising from nuclear explosion or contamination
> War (declared or not) between two or more of these countries China,
France, UK, USA, Russia

Page 3
Other key points to be known
> Maximum Credit Period – 180 days

> Maximum Notification Period - 210 days

> Stop Shipment is 60 days from due date. Can be looked at 90 days

> Limit application for new buyers – need name, address and contact number.
Financials always help to get a better limit

> Limit enhancement for existing buyer requires trade history

Page 4
Payment of the claims

> Claims are paid :


> - 5 months from the date of reporting a claim for
protracted default losses.
> 30 days in case of insolvency or bankruptcy where the
official liquidator admits the claim.

Documents required for filing a claim –


> Claim Form
> Copies of Invoices
> Purchase orders/ sales agreement, if available
> Delivery receipts
> Statement of account with the debtor,
> Correspondence with the debtor following up for payment –
emails, notices etc

Page 5
Few Clients
> Nikon - Japanese
> Motherson Sumi - Japanese
> Sakata Inx - Japanese
> Konica Minolta - Japanese
> Metal One – Japanese
> Terex India – US
> HCL – Indian Multinational
> Gionee – Chinese
> Escorts – Indian Business House (Tractors)
> Micromax – Mobiles
> HTC – Taiwanese
> V Guard Industries – Indian
> Lava International – Mobiles
> IMR Group – United Kingdom – Coal and Coke Business
> Spice Group
> Supertron

Page 6
Thank You

Page 7

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