Business on the international market can be unpredictable, and export credit insurance exists to help U.S. exporters operate with greater confidence. When it comes time to find an export credit insurance company, know what will work best for your organization and find an export credit insurance company that has a policy to match.
When you shop for an export credit policy, transparency is crucial – if an export credit insurance company is straightforward with its policy terms, take it as a good sign. Also, look for these indicators that you found a reliable export credit insurance company.
Some export credit insurance companies offer a variety of policy structures, typically based on time frame of coverage and number of buyers. For example, you can shop for a policy that covers only your biggest clients, and the export credit insurance company will set a credit limit per customer. Some export credit insurance companies allow you to set your own limits for each customer, depending on your organization’s creditworthiness. You can also shop for a policy that covers all foreign receivables. Depending on the type of business you do, you may want to find an export credit insurance company that covers domestic transactions as well.
Typically, export credit insurance covers your foreign receivables against things like business closures, currency fluctuations, customer insolvencies, general economic instability, and natural disasters. Make sure a potential export credit insurance company offers coverage for your largest areas of risk. Additionally, look for an export credit insurance company that offers political risk insurance. This type of coverage protects your receivables in case of embargoes, war, trade sanctions, expropriation, and changes in export regulations.
Finally, one of the most important aspects of any export credit insurance policy you purchase will be the up-front premium cost. Typically, this fluctuates based on the payment terms you wish to extend to your foreign buyers, and your export credit insurance company will likely adjust your premium rate based on your company’s history. Generally, the cost of export credit insurance is quite low, compared with the peace of mind it offers.
These are just a few indicators of a reliable export credit insurance company. Carefully review any policy before agreeing to it, and don’t shy away from asking your contacts about a potential insurer to get firsthand reviews of their flexibility and reliability.
In an unpredictable and sometimes turbulent market, rest easy knowing your export business is covered. Reach out to the experts at Drake Finance today to discuss your export credit insurance options.