CONTRACT INSURANCE (Single Risk)
Contract Insurance (Single Risk) covers the risk of one project or one contract for one specific buyer at the time. The Single Risk Product may cover only pre-delivery risk, only credit risk or a combination of both pre-delivery and credit risk.
When the Contract Insurance Product only covers credit risk it is also known as a “Supplier’s Credit Guarantee”
E.g. when the exporter in Norway gives the foreign buyer credit, we may provide insurance cover so that the exporter is assured payment. The insurance applies if the buyer goes bankrupt or other circumstances occur that cause the buyer to have problems making payments.
A Contract Insurance Policy may cover several deliveries as long as they belong under the same export contract.
For many companies it is not only the outstanding receivables that represent a risk. Companies with a long production period or who delivers custom-made products run an additional risk. Their customer may become insolvent, go bankrupt or violate the contract during the production period. Pre-delivery risk cover can be offered in separate Single Risk policies, alone or combined with credit risk cover.
The maximum risk period (production period + credit period) we may cover are 2 years.
Pre-delivery cover protects the exporter against losses that may occur during the production period prior to delivery as a result of non-completion or non-fulfilment by the purchaser of concluded contracts as a result of the purchasers' bankruptcy, insolvency or political events.
The maximum risk amount that is covered under the pre-delivery cover is the net cost of production, including both direct and indirect costs that the exporter has in connection with the export contract up until the breach of contract from the buyer. If the exporter has received any advance payment under the export contract, the cost of production will be reduced accordingly.
We cover up to 90% of the risk amount. The figure is an illustration on the pre-delivery cover: