Pre & Post Shipment Comprehensive Non-Payment Insurance (private buyer)
Supply of heavy fabricated equipment and spare parts
Period of Cover:
18 months (being 6 months pre-shipment fabrication period followed by 12 months post shipment)
Exporter's lender was named as Loss Payee
Comprehensive Non-Payment refers to both Commercial (buyer insolvency and protracted default) and Political Risks (embargo, currency inconvertibility, License Cancellation, War) of default.
We covered the pre-shipment costs and expenses incurred (including payments due to third party vendors) plus work in progress expenses in the event that the foreign buyer of the equipment failed or refused to meet their contractual payment obligations. Coverage began at contract signing and was effective up until the cargo is loaded en-route to final destination.
Post shipment would cover non-payment risk once the cargo is loaded and would cover the non-payment of invoices/purchase orders, etc.
If the foreign buyer happened to be a government/quasi-government or government owned entity, coverage could have expanded the cover to include the repudiation of the contract as well as Arbitration Award Default insurance.