1. A 12-month insurance policy for small exporters.
2. Premium payable will be determined on the basis of projected exports on an annual basis subject to a minimum premium of INR 5000 for the policy period. No claim bonus in the premium rate is granted every year at the rate of 5%.
3. For shipments covered under the Small Exporter's Policy ECGC will pay claims to the extent of 95% where the loss is due to commercial risks and 100% if the loss is caused by any of the political risks.
Type of risks covered
I. Risks covered on the overseas buyers:
- Insolvency of the buyer.
- Failure of the buyer to make the payment due within a specified period, normally 2 months from the due date.
- Buyer’s failure to accept the goods, subject to certain conditions.
II .Risks covered on the L/c opening Bank
- Insolvency of the L/c Opening bank
- Failure of the L/C opening bank to make the payment due within a specified period normally 2 months from the due date.
b. Political Risks
- Imposition of restriction by the Government of the buyer’s country or any Government action, which may block or delay the transfer of payment made by the buyer.
- War, civil war, revolution or civil disturbances in the buyer’s country. New import restrictions or cancellation of a valid import license in buyer’s country.
- Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which cannot be recovered from the buyer.
- Any other cause of loss occurring outside India not normally insured by general insurers, and beyond the control of both the exporter and the buyer.