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Credit Insurance
Benefits of Credit Insurance
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What are the types of policies available?
What are the advantages to the exporter and overseas buyer?
Does the exporter have to pre-qualify?
Does the buyer have to pre-qualify?
How to obtain a credit report?
Who makes the final credit decision on the buyer?
How much does credit insurance cost?
Can the exporter pass the cost along to the buyer?
Must the goods be of U.S. origin to be eligible?
Are there any countries that are not eligible for insurance?
How can you apply for credit insurance?
What are the types of policies available? (top)
Single Buyer
Multi Buyer
Short Term (up to 180 days)
Medium Term (more than 180 days and up to 5 years)
What are the advantages to the exporter and overseas buyer?
(top)
Reduces repayment risk to the exporter. Provides peace of mind.
Allows exporter to provide more liberal payment terms to overseas buyer.
Increases sales without added cost. (Cost of insurance is passed on to the overseas buyer.)
Eliminates costly letters of credit and other bank fees.
Avoids buyer from having to tie up line of credit for L/C’s and other credit commitments.
Allows exporter to borrow against export receivables.
Does the exporter have to pre-qualify? (top)
Exporter must have:
Good credit approval and collections procedures.
Export sales experience is preferable but not required.
Receivables are current with minimal loss history.
Sales to countries with acceptable risk.
Does the buyer have to pre-qualify? (top)
New buyers:
Credit report or trade/bank references
Financial statements (depending on required credit limit)
Existing Buyers:
Good ledger experience (i.e. prompt repayment)
How to obtain a credit report? (top)
You may order your credit report online. To order a credit report click here.
Credit reports provide information on buyer, which may include ownership, summary of financial statements, liens, lawsuits/legal judgments, bank and trade references, and payment experience.
Who makes the final credit decision on the buyer? (top)
If policy has a discretionary credit limit:
Credit decisions are made by exporter up to the credit limit granted by insurance company.
Limits exceeding the discretionary credit limit are approved by insurance company.
If policy has no discretionary credit limit:
Insurance company approves limits granted to each buyer.
How much does credit insurance cost? (top)
Depends on payment terms, industry sector, buyers, and country mix.
Priced based on insured sales or credit limit granted to buyer.
Price may range from 0.10% to 0.50% (or higher) of insured sales amount, depending on buyer mix.
Can the exporter pass the cost along to the buyer? (top)
Yes. Build insurance premium into the export quotation.
Buyer is often willing to pay the insurance premium, since it is cheaper financing than may be obtained from buyer’s bank in the foreign country.
Must the goods be of U.S. origin to be eligible? (top)
No. Third-country goods are also insurable.
Goods must be shipped into the foreign country to be eligible for insurance.
Goods shipped to an exporter’s foreign sales office, and then sold to foreign buyers are also eligible for insurance.
Are there any countries that are not eligible for insurance?
(top)
Yes. Sales to countries with high risk (either Political or Credit) or which do not have relations with the U.S. are not eligible for insurance.
How can you apply for credit insurance? (top)
Complete a short credit insurance application. Contact CFS
International info@cfsintl.com or
call (877) CFS INTL ext. 204 to obtain a copy of the application or
consult with a credit insurance professional.
We will obtain quotes from various insurance companies and help you select the coverage that best meets
your objectives.
Notice: Information contained on this website is for general informational purposes only. Coverages and services mentioned will not be available for all entities. Please refer to your actual insurance policy and all endorsements for actual coverage information.
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