Export credit insurance affords several benefits to policyholders. Most people assume export credit insurance only safeguards against foreign buyer nonpayment, but there are several other advantages if you partner with a reliable and flexible insurer.
Some of the additional advantages of export credit insurance include protection from the following:
- Business closures. If a foreign buyer suddenly shutters its doors after you’ve shipped or delivered your goods, who will pay you for that invoice? Export credit insurance can offer peace of mind in case something like this happens, so you don’t have to eat the loss.
- Currency fluctuation. Exchange rates change on a daily – sometimes hourly – basis. A sudden shift could mean that the agreed-upon price for your invoice is no longer worth what it was when the deal was signed. Rather than let this be a loss, export credit insurance can protect your company.
- Natural disasters. Depending on where you ship your goods, you may risk losing shipments to tropical storms, hurricanes, or other natural disasters. Export credit insurance typically covers losses caused by unforeseen natural disasters.
- Embargoes. Imagine you send a shipment to another country, and while it is en route, the United States places an embargo on the destination country. Rather than lose the sale amount, export credit insurance protects against embargo-induced losses.
- War and civil unrest. Unfortunately, we live in volatile times and conflicts spring up across the world on a regular basis. A foreign buyer may need to cease operations suddenly to stay safe in such an event, or other wartime concerns can cause roadblocks for an export transaction.
- Expropriation. In some cases, your shipment may arrive at the destination country, but someone other than the intended buyer expropriates the goods. The buyer will likely refuse to pay for goods taken from them, and export credit insurance usually covers this possibility.
These are just a few reasons every American export company should purchase – or at least investigate – export credit insurance. Not only does it provide peace of mind in the face of the unknown, it also affords insured organizations the flexibility necessary to conduct business with greater confidence.
Don’t let unforeseen circumstances handicap your business. Reach out to the experts at Drake Finance today to find the export credit insurance that will help keep your business running smoothly.