Credit Insurance FAQs

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  • Principle of Uberrimae fidei (Utmost Good Faith)

    The person getting insured must voluntarily disclose to the insurer,complete and true information regarding export transactions/ business sought to be insured. Correspondingly, insurer must provide to the insured, complete and clear information regarding terms and conditions of the contract of Insurance.

  • Principle of Insurable Interest

    The insured must have pecuniary interest in the contract of insurance. The insured must stand to benefit from the receipt of export proceeds and to suffer the losses arising due to commercial and political risks specified in the policy.

  • Principle of Indemnity

    A credit insurance policy is offered by the insurer for giving protection against unpredicted financial losses arising due to political and commercial risks. The compensation cannot be more than the actual loss. Further, the compensation paid will be on account of the losses specified in the policy and incurred by the insured during the policy period.

  • Principle of Risk Sharing

    The credit insurer does not indemnify 100% of the losses incurred by the insured, but a certain mutually agreed percentage of the losses, thus envisaging that the insured has a reasonable stake in the export transactions. This should be borne out by the manner in which the insured carries out the transaction(s) and protects the assets.

  • Principle of Causa Proxima (Nearest Cause)

    When a loss is caused by more than one cause, the proximate or the nearest or the closest cause will be taken into consideration to decide the liability of the insurer.

  • Principle of Loss Minimization

    It is the duty of the insured to take all possible steps to minimize loss arising on account of risks specified in the policy. It is the responsibility of the insured to take all practicable measures to avoid further losses.

  • Principle of Subrogation of rights

    The Insurer, having compensated the insured for the losses, is entitled to avail himself of the rights to recover the same from the buyer/ importer/ debtor. Upon payment of a claim by the insurer, the insured shall take all necessary steps to effect recoveries or shall on the advice of the insurer, assign and transfer his rights and remedies for recovery to the insurer.


  • ECGC Ltd. (Formerly Export Credit Guarantee Corporation of India Ltd.), wholly owned by Government of India, was set up in 1957 with the objective of promoting exports from the country by providing Credit Risk Insurance and related services for exports. Over the years it has designed different export credit risk insurance products to suit the requirements of Indian exporters and commercial banks extending export credit.

    ECGC is essentially an export promotion organization, seeking to improve the competitiveness of the Indian exporters by providing them with credit insurance covers. ECGC keeps its premium rates at the optimal level.

    This brochure contains various export credit risk insurance products/covers available to the exporters. The Corporation also issues specific customised covers to the exporters to meet their individual needs.


Generally, the following risks are covered under the various Policy Schemes for exporters:
  1. Commercial Risks

    • Insolvency of the buyer
    • Failure of the buyer to make the payment due within a specified period, normally 4 months from the due date.
    • Buyer’s failure to accept the goods, subject to certain conditions.
  2. 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 licence.
    • War, civil war, revolution or civil disturbances in the buyer’s country.
    • New Import restrictions or cancellation of a valid import licence.
    • Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which can’t 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.


    The policies do not cover losses due to the following risks:
  • Commercial disputes including quality disputes raised by the buyer, unless the exporter obtains a decree from a competent court of law in the buyer’s country in his favour.
  • Causes inherent in the nature of the goods.
  • Buyer’s failure to obtain necessary import or exchange authorisation from authorities in his country.
  • Insolvency or default of any agent of the exporter or of the collecting bank.
  • Loss or damage to goods which can be covered by general insurers.
  • Exchange rate fluctuation.
  • Failure of the exporter to fulfill the terms of the export contract or negligence on his part.

end faq