Exporting Your Goods

Insurance Against Non-Payment

Sales into foreign markets entail a number of commercial and political risks that can be offset through appropriate insurance products. The following six questions and answers can help you determine what types of insurance to consider:

What types of insurance against non-payment are available?
What is accounts receivable insurance?
What is single buyer insurance?
What is EXPORTProtect?
What is contract frustration insurance?
What is performance security insurance?

What types of insurance against non-payment are available?
  • Accounts receivable insurance (ARI)
  • Single buyer insurance
  • Single transaction insurance (EXPORTProtect)
  • Contract frustration insurance
  • Performance security insurance (PSI)

What is accounts receivable insurance?

EDC’s account receivable insurance policy pays you for up to 90 per cent of the value of outstanding accounts receivable if you (or your foreign affiliates) do not receive payment for reasons such as:

  • Customer’s refusal to pay
  • Customer’s refusal to accept the goods once delivered
  • Contract cancellation after shipping has commenced
  • Customer bankruptcy or insolvency
  • Cancellation of import or export licenses and permits
  • Non-convertibility of currency or inability to transfer funds
  • War, revolution, or insurrection

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What is single buyer insurance?

EDC’s single buyer insurance pays you for up to 90 percent of your losses through sales during a six month coverage period worth up to US$250,000 to the same customer who does not pay after accepting the goods. Reasons for non-payment may include:

  • Customer bankruptcy or insolvency
  • Non-convertibility of currency or inability to transfer funds
  • War, revolution, or insurrection
What is EXPORTProtect?

You can apply for insurance online from EDC on a single transaction to protect you against non-payment.

What is contract frustration insurance?

Contract frustration insurance pays you for up to 90 per cent of costs incurred or receivables lost in association with a specific export contract for services, capital goods, or projects, protecting you against a range of commercial and political risks including:

  • Customer's refusal to pay
  • Customer's bankruptcy or insolvency
  • Contract cancellation
  • Cancellation of export or import licenses and permits
  • Non-convertibility of currency or inability to transfer funds;
  • War, revolution, or insurrection
  • Host government’s moratorium on debt

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What is performance security insurance?

Performance security insurance pays you for up to 95 per cent of your losses if your customer demands payment of a bond issued by your bank without valid reason. When a customer demands payment on a bond (an irrevocable letter of credit  or letter of guarantee), your bank must pay immediately. This insurance protecting you against a wrongful call is a complement to the performance security guarantee, whose purpose is to free up working capital.