2. 1. The insolvency of the purchase 2. The default on payment by a private purchaser at the end of the credit period or after some specified period following the expiry of the agree term of credit. 3. Non-acceptance of goods delivered to the purchaser, where such goods comply with any contracts in existence. 1. Cancellation or non-renewal of an insured’s export license after a contract has been struck. 2. War and other such disturbances. 3. Foreign currency conversion risks. 4. Transfer risks 5. The action of a foreign government 6. Transaction between private exporters and public purchaser.

3. 11.1.4Limits of indemnity 11.1.3The rationale behind export credit insurance In its purest form, export credit insurance provides exporters of goods and services with a significant degree of financial security, thus allowing companies to pursue a bolder export policy, by accepting new purchasers and entering into new overseas markets, but with a smaller impact from the risks of non-payment and political instability. Generally, cover is provided up to some specified percentage of any loss, typically between 80 per cent and 95 per cent.

4. 11.1.5 Recoveries and subrogation In any event, the export credit insurer will generally seek to effect recoveries on claims paid, either through the courts, via factors; through pressure form British embassies in the purchaser’s country of domicile; or via some other form of debt collection in order to offset individual losses. 11.1.6 Who provides export credit insurance? Schemes are often operated by the governments of individual countries. State-backed schemes have the added attraction of generally being considered to be less likely than private insurance companies to withdraw cover for political risks in respect of specific countries.

5. 11.2 Short-term export credit insurance The political risks can be subdivided into three different areas: 1 2 3 Inconvertibility Contract frustration/cancellation Public buyer default

6. 11.2.1 Companies offering credit insurance ECGD Four operating rules Euler Hermes Its aim is to support the business development of companies in national and international markets, by optimizing and safeguarding the management of their trade receivables.