ECGC Policies

ECGC Policies
Specific Policy

For exports under
Deferred Payments,
Project Exports,
Service exports
Standard Policy

For short term
shipments
(180 Days)

Financial
Guarantees to
Banks

For
Giving credit
to exporters
Special
Schemes
(Transfer Guarantee )

To protect Banks
Issuing L/C,
Confirming L/C,
Insurance Cover,
Line of Credit,
Overseas Investment
Insurance & Exchange
Fluctuation Risk
Insurance
Credit Insurance Policies
SCR or Standard Policy
Small Exporters Policy
Specific Shipment Policy-Short terms (SSP-ST)
Export (Specific Buyer) Policy
Export Turnover Policy
Buyers Exposure Policies
Consignment Export Policies (Stockholding agent and Global entity)
Service Policy
Software Project Policy
IT-enabled service (Specific customer) Policy
Construction Works Policy
Specific Policy for supply contract
Insurance Cover for Buyers credit and Line of credit
Small and Medium Exporters Policy
SCR or Standard Policy

Shipments (Comprehensive Risks) Policy, commonly known as the Standard Policy, is the one ideally
suited to cover risks in respect of goods exported on short-term credit, i.e. credit not exceeding 180
days. This policy covers both commercial and political risks from the date of shipment. It is issued to
exporters whose anticipated export turnover for the next 12 months is more than Rs.50 lacs. (The
appropriate policy for exporters with an anticipated turnover of Rs.50 lacs or less is the Small
Exporter's Policy, described separately).

What are the risks covered under the Standard Policy ? Under the Standard Policy, ECGC covers,
from the date of shipment, the following risks:

a. Commercial Risks Insolvency of the buyer . Failure of the buyer to make the payment due within
a specified period, normally four months from the due date. Buyer's failure to accept the goods,
subject to certain conditions.

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 the buyer's country. Interruption or diversion of voyage outside India
resulting in payment of additional freight or insurance charges which can not 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.

Dos and Donts For SCR -Click Here.
The policy does 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 favor. Causes inherent in the nature of the goods. Buyer's failure to obtain
necessary import or exchange authorization 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 or negligence on the part of the exporter to
fulfill the terms of the export contract.

Which all shipments made by the exporter are required to be covered under the Standard
Policy?The Standard Policy is meant to cover all the shipments made by an exporter, on credit
terms during the period of 24 months after the issue of the policy. In other words, an exporter is
required to offer for the cover of the policy each and every shipment that may be made by him in
the next 24 months on DP, DA or Open Delivery terms to all buyers other than his own associates.

Are there any shipments excluded from the purview of the Standard Policy?An exporter may
exclude shipments made against advance payment or those, which are supported by irrevocable
Letters of Credit, which carry the confirmation of banks in India, since he faces no risk in respect of
such transactions. Exporters of the status of trading houses and above are allowed to exclude
shipments of specified commodities or shipments to buyers in specified countries or any
combination of these two, from the purview of the Standard Policies held by them.

Are L/C shipments required to be covered by the Standard Policy?Exporters holding Standard
Policy may opt to get shipments against irrevocable Letter of Credit excluded from the scope of the
policy. However, unless they are confirmed by banks in India, payment under irrevocable Letters of
Credit is subject to political risks. Exporters are, therefore, well advised to get such shipments also
covered under the policy. For such shipments, an exporter has option to obtain cover for either
political risks only or for comprehensive risks, i.e., for all political risks and the risk of insolvency or
default of the bank opening the irrevocable Letter of Credit. The comprehensive risk cover also
provides indemnity to the exporter to the extent of 25% of the gross invoice value if the LC opening
bank refuses payment on the ground of discrepancies in LC, which are not clearly attributable to
the exporter. In either case, cover will be provided by ECGC only if the exporter agrees to get all the
shipments made against irrevocable Letter of Credit covered under the policy. Cover will not be
available for selected transactions.
Are shipments made to exporter's associates covered by the Standard Policy?Shipments to
foreign buyers who are associates of the exporters, i.e. in whose business the exporter has a
financial interest, are normally excluded from the policy. They can, however be, covered
against political risks under the policy if an exporter so desires. Where both the exporter and
the associate are public limited companies and where the exporter's share holding in the
associate does not exceed 49%, cover can be provided against insolvency risks in addition to
the political risks.
Is there any difficulty in covering air shipments under the Standard Policy?When shipments are
made by air, the buyers are often able to obtain delivery of the goods from the airlines before
making payment of the bills or accepting them for payment, as the case may be. Earlier such
shipments could be covered only if the exporter was holding appropriate credit limit on open
delivery (OD) terms and had paid premium at the higher rates applicable for OD. ECGC has now
decided that credit limits sanctioned under DA will be valid for OD also. Moreover, for shipments
made after 1
st
April, 2003, the premium rates for DA will apply for OD also. As a result, shipments
by air can be covered by the Standard Policy if the exporter holds a valid credit limit under DA and
pays premium at the rates applicable for the relevant credit period under DA.
Can pre-shipment risks be covered under the Standard Policy?The Standard Policy provides
cover only for the post-shipment risks. Pre-shipment losses, i.e. losses which may be
sustained by an exporter due to impossibility of exporting goods already manufactured or
purchased for reasons like ban on export of the item, restrictions on import of the items into
the buyer's country, war, civil war, etc., are not covered under the policy. Normally such a risk
is very low in respect of raw materials, primary products, consumer goods or consumer
durables, which can easily be sold to alternate buyers. Where, however, the export involves
an item, which is manufactured to the non-standard specifications of a buyer, cover can be
provided for the pre-shipment risks as well as the post-shipment risks under the Contract
Policy (described separately).
Can shipments made on credit exceeding 180 days be covered? The policy is meant to provide
cover for shipments involving a credit period not exceeding 180 days. In exceptional cases,
however, cover may be granted for shipments with longer credit period, provided that such longer
credit periods are justifiable for the export items concerned.
Is there any ceiling to ECGC's liability under the Standard Policy? Yes. ECGC will fix a
Maximum Liability under each Standard Policy, which is intended to cover all the shipments
during a period of 24 months from the date of issue of the Policy. The Maximum Liability is
the limit up to , which ECGC would accept liability for shipments made in each of the policy-
years, for both commercial and political risks. The exporters are advised to estimate the
maximum outstanding payments due from overseas buyers at any one time during the policy
period and to obtain the policy with Maximum Liability for such a value. The Maximum
Liability fixed under the policy can be enhanced subsequently, if necessary.
After obtaining a Standard Policy with a suitable Maximum Liability, what else should the
exporter do to ensure that his shipments are insured? The exporter has to get a credit limit
approved from ECGC in respect of each foreign buyer to whom he would like to make
shipments on DP/DA/OD terms of payment. In addition, if shipments are made to a buyer in
some of the countries classified by ECGC as restricted cover countries (see below for details),
Specific Approval of ECGC should be obtained for such shipment. Further, the exporter has to
declare to ECGC all his shipments and pay premium as explained later
What is the purpose of credit limit and what should the exporter do to get it sanctioned ?
Commercial risks are covered under the policy only if a credit limit is approved by ECGC on each
buyer to whom shipments are made on credit terms. The exporter has, therefore, to apply for a
suitable credit limit on each buyer. On the basis of its own judgement of the creditworthiness of
the buyer, as ascertained from credit reports obtained from banks and specialized agencies abroad,
ECGC will approve the credit limit which is the limit up to which it will pay claim on account of
losses arising from commercial risks on account of that buyer. The credit limit is a revolving limit
and once approved, it will hold good for all shipments to the buyer as long as there is no gap of
more than 12 months between two shipments. Credit limit is a limit on ECGC's exposure on the
buyer for commercial risks and not a limit on the value of shipments that may be made to him. In
case of losses due to political risks, ECGC's exposure is not restricted by the credit limit. Premium
has, therefore, to be paid on the full value of each shipment even where the value of the shipment
or the total value of the bills outstanding for payment is in excess of the credit limit.

As the credit limit is indicative of the safe limit of credit that can be extended to the buyer, the
exporters are advised to see that the total value of the bills outstanding with the buyer at any one
time is not out of proportion to the credit limit. In cases where the credit limit that ECGC is
prepared to grant is far lower than the value of outstanding bills, exporters may discuss the
problem with ECGC officials.
What are the charges to be paid for getting credit limit sanctioned?ECGC spends a considerable
amount of money for obtaining reports on overseas buyers from banks and credit information
agencies abroad in order to assess their credit standing and approves credit limits based on such
assessment. ECGC charges a status enquiry fee of Rs.500 for each credit limit application. An
exporter need not pay status enquiry fee for credit limits upto Rs.5 lac, if he furnishes a bank report
not older than 6 months on the buyer.
Can any shipment be made without obtaining credit limits?Yes, in the following cases the
shipments will be covered under the policy even if he has not applied for credit limits; in other
words the exporter can avail of discretionary credit limits.Rs.20 lacs for DP/CAD transactions on a
particular buyer subject to the condition that claim will be limited to four buyers during the
currency of the policy.Rs.10 lacs on a particular buyer for DA/OD transactions in respect of
exporters who have paid at Rs.5 lacs as premium in the immediately preceding policy year.Rs.15
lacs for DA/OD transactions and Rs.40 lacs for DP/CAD transactions subject to the condition that the
aggregate credit limit on any single buyer under this sub-clause shall not exceed Rs.40 lac provided
that,At least one shipment was effected by the exporter to the buyer during the preceding one year
on similar payment terms and it was not less than the discretionary limit availed of by the exporter
andThe buyer had made payment for that shipment on the due date.The above discretionary limits
applicable for DP/CAD transactions will be available for LC sight terms and the discretionary limits
applicable for DA/OD transactions will be available for LC usance terms also.

What are restricted cover countries? Is any special procedure applicable for exports to them?For
a large majority of countries, the Corporation places no limit for covering political risks. Such
countries are referred to as 'open cover' countries. More than 85% of the countries in the world,
which account for over 99% of the country's exports are open cover countries. However, in the case
of certain countries where the political risks are very high, cover is granted on a restricted basis. In
respect of a majority of such countries, revolving limits normally valid for one year are issued in
place of credit limits. The procedure for sanction of revolving limits is the same as for credit limits.
In respect of the few remaining countries under restricted cover, which are high risk countries,
specific approvals are given on the merits of each case. The period of validity of the specific
approval is six months.
What is the percentage of cover provided by ECGC?ECGC normally pays 90% of the loss,
whether it arises due to commercial risks or political risks. The remaining 10% has to be
borne by the exporter himself. However, ECGC reserves the right to offer a lower percentage
of cover in certain cases.
What is the premium an exporter has to pay for a Standard Policy?Premium payable will be
determined on the basis of projected exports on an annual basis subject to a minimum
premium of Rs. 10,000 for the policy period. Cash discount can be availed by the exporters
paying premium upfront under the policies (on quarterly / annually basis as the case may be
under relevant policy @ 1% and 5% respectively).
What is the time limit for declaration of shipments ? On or before the 15th of every month the
policyholder is required to declare to ECGC in a prescribed form, all the shipments made by him in the
preceding calendar month. If no shipment is made in a month, a NIL declaration should be sent.
Is any reduction allowed in the premium rates? If no claim is made on ECGC during a policy period
of one year, a no-claim bonus of 5% is granted in the premium rates at the time of renewal of the
policy. No claim bonus can be accumulated for every policy period till a maximum bonus of 50% is
reached.
Is the exporter liable to pay premium if the credit limit asked for on a buyer is either refused or
not sanctioned to the full extent?In respect of shipments to buyers on whom ECGC has refused
credit limits, the exporter will have the option of either paying premium for only political risks or
not paying any premium at all. If the full amount of credit limit asked for by an exporter on a buyer
is not sanctioned by ECGC, the exporter will have the option of paying comprehensive premium on
all shipments to the buyer (with the cover for commercial risks restricted to the credit limit
sanctioned, but cover for political risk to the full extent) or paying premium for political risks only
on all shipments or not paying any premium for the shipments to that buyer under the Standard
Policy.
Is approval of ECGC required for extending credit period or changing the tenor of the bills?Yes. It
may sometimes become necessary for an exporter to extend the credit period of a DA bill or to
convert a DP bill into a DA bill in circumstances in which the buyer is unable to meet the payment
obligation as per the original tenor of the bill. Whenever a policyholder wishes to grant such
extensions or conversions for good reasons, he should get the prior approval of ECGC and pay the
necessary additional premium.

Should ECGC approval be taken for resale of unaccepted goods?Not always. The policyholder is
obliged to take immediate and effective action to minimize the possible loss if and when a buyer
does not take delivery of the goods. If he wishes to resell the goods to an alternate buyer or bring
back the goods to India, approval of ECGC is to be obtained only if the loss on account of resale or
reshipment exceeds 25% of the gross invoice value. Notice of resale should be given to the original
buyer so that it would be possible to take legal action against him subsequently, if considered
necessary, for recovery of the loss.
How is the amount recovered from foreign buyer shared?All amounts recovered, net of
recovery expenses should be shared with ECGC in the ratio in which the loss was originally
shared.
Small Exporters Policy

The Small Exporter's Policy is basically the Standard Policy, incorporating certain improvements in
terms of cover, in order to encourage small exporters to obtain and operate the policy. It is issued
to exporters whose anticipated export turnover for the period of one year does not exceed
Rs.50lakhs

In what respects is the Small Exporter's Policy different from the Standard Policy?

Period of Policy: Small Exporter's Policy is issued for a period of 12 months, as against 24 months in
the case of Standard Policy.

Minimum premium: Premium payable will be determined on the basis of projected exports on an
annual basis subject to a minimum premium of Rs. 2000/- for the policy period.No claim bonus in
the premium rate is granted every year at the rate of 5% (as against once in two years for Standard
Policy at the rate of 10%).

Declaration of shipments: Shipments need to be declared quarterly (instead of monthly as in the
case of Standard Policy).

Declaration of overdue payments: Small exporters are required to submit monthly declarations of
all payments remaining overdue by more than 60 days from the due date, as against 30 days in the
case of exporters holding the Standard Policy.


Percentage of cover: 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 (Under the Standard Policy, the extent of cover is 90% for both commercial and
political risks).

Waiting period for claims: The normal waiting period of 4 months under the Standard Policy
has been halved in the case of claims arising under the Small Exporter's Policy.

Change in terms of payment of extension in credit period: In order to enable small exporters
to deal with their buyers in a flexible manner, the following facilities are allowed: A small
exporter may, without prior approval of ECGC convert a D/P bill into DA bill, provided that he
has already obtained suitable credit limit on the buyer on D/A terms. Where the value of this
bill is not more than Rs.3 lacs, conversion of D/P bill into D/A bill is permitted even if credit
limit on the buyer has been obtained on D/P terms only, but only one claim can be
considered during the policy period on account of losses arising from such conversions. A
small exporter may, without the prior approval of ECGC extend the due date of payment of a
D/A bill provided that a credit limit on the buyer on D/A terms is in force at the time of such
extension.

Resale of unaccepted goods: If, upon non-acceptance of goods by a buyer, the exporter sells
the goods to an alternate buyer without obtaining prior approval of ECGC even when the loss
exceeds 25% of the gross invoice value, ECGC may consider payment of claims upto an
amount considered reasonable, provided that ECGC is satisfied that the exporter did his best
under the circumstances to minimize the loss.
In all other respects, the Small Exporter's Policy has the same features as the Standard Policy.
For Dos and Donts of this policy-Click here

Specific Shipment Policy-Short terms
(SSP-ST)

Specific Shipment Policies - Short Term (SSP-ST) provide cover to Indian exporters against
commercial and political risks involved in export of goods on short-term credit not exceeding 180
days. Exporters can take cover under these policies for either a shipment or a few shipments to a
buyer under a contract. These policies can be availed of by:

(i) exporters who do not hold SCR Policy and

(ii) by exporters having SCR Policy,in respect of shipments permitted to be excluded from the
preview of the SCR Policy.

Different types of SSP (ST)
Specific Shipments (commercial and political risks) Policy - short-term .
Specific Shipments (political risks) Policy - short-term.
Specific Shipments (insolvency & default of L/C opening bank and political risks) Policy -
short-term.

For Dos and Donts of policy- Click here
What are the different risks covered under SSP (ST)?
Commercial risks: [For SSP-ST policies of the type Specific Shipments commercial
and political risks]
Insolvency of the buyer.
Failure of the buyer to make the payment due within a specified period, normally
four months from the due date.
Buyer's failure to accept the goods (subject to certain conditions).

Political risks: [For all the SSP-ST policies]
Imposition of restrictions 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;
Interruption of voyage outside India resulting in payment of additional freight or
insurance charges which cannot be recovered from the buyer.

Insolvency & default of LC opening bank [For SSP-ST policies of the type insolvency & default of L/C
opening bank and political risks].
Insolvency of the L/C opening bank;
Failure of the LC opening bank to make the payment due within a specified period, normally four months,
from the due date.
What are the risks not covered under SSP (ST)?
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 goods;

Buyer's failure to obtain necessary import or exchange authorization from authorities in his country;

Insolvency or default of any agent of the exporter or of the collecting bank;

Loss or damage to goods;

Exchange rate fluctuation;

Failure of the exporter to fulfill the terms of the export contract or negligence on his part ;

Non-payment under a letter of credit due to any discrepancy pointed out by the L/C opening bank.
Which all shipments can be covered under SSP (ST)?The exporter can opt to cover one or more shipments
under a particular contract. He can also choose to cover shipments made during a given period within the
validity of the contract. For example if an exporter has received a contract for supply of goods within a
period of say, one year, he can choose to cover a batch of shipments to be made within a period, say 90
days or 180 days. He may opt to cover further shipments under another specific policy at a later date.

What is the period of validity of SSP (ST)?The policy would be valid for shipment(s) made from the date of
receipt of proposal up to the last date allowed under the relevant contract for shipment. If the exporter
has chosen to cover the shipments to be made during a particular period, the policy would be issued for
that period. In case the policy is issued to cover a shipment already made before the proposal is
submitted, the policy would be valid only for that shipment. If the proposal is to cover the shipment
already made under a contract and to cover further shipments to be made under the same contract, the
policy shall be issued for the period from the date of the shipment already made up to the period of
contract or the period as desired by the exporter, whichever is earlier.

What is the percentage of cover provided by SSP (ST)?The percentage of cover normally available
under the policy would be 80% of the gross invoice value of the shipments covered, in respect of
countries in open cover. However, policy could also be issued with a lower percentage of cover with
proportionate reduction in the amount of premium payable and the amount of maximum liability.
The percentage of cover in respect of countries under restricted cover category would depend
upon the underwriting policy applicable for the country at the relevant point of time.

What is the maximum liability of ECGC under SSP (ST)?The maximum liability (ML) which is the
limit up to which ECGC would accept liability under the policy is arrived at by applying the agreed
percentage of cover to the gross invoice value of the shipments covered under the policy.
Enhancement in ML, if necessitated by amendment to the original contract, can be considered
subject to payment of additional premium by an endorsement to the policy issued.

What are the circumstances in which the cover under SSP (ST) can be withdrawn?In case of
any adverse experience / report on the buyer or his country ECGC or the exporter can
withdraw the cover. For the shipments made prior to such withdrawal, cover would be
available.

Is it possible to seek extension of the validity period of the SSP (ST)?If the exporter fails to
make the shipment within the validity of the contract, he can seek extension of the period of
validity of the policy after getting the contract duly extended.


When is the loss under SSP (ST) to be ascertained ? Normally loss shall be ascertained four months
after the due date. In case of insolvency risk, loss shall be ascertained one month from the date of
admission of debt by the receiver or four months from the due date whichever is earlier. Where the
debt is yet to be admitted by the receiver an undertaking from the exporter has to be obtained
stating that he has done nothing or not omitted to do anything that will make his claim in the
insolvent estate in-admissible. Where the loss is due to non-acceptance of goods, loss shall be
ascertained only after the goods are resold or otherwise disposed of and in any case not earlier
than four months from the due date of the payment.
When can the exporter file a claim under SSP (ST)? An exporter can file his claim under the
policy any time after the loss is ascertained but within one year from the due date of
payment for the shipment under claim.


Export (Specific Buyer) Policy
Buyerwise Policies - Short Term (BP-ST) provide cover to Indian exporters against commercial and
political risks involved in export of goods on short-term credit to a particular buyer. All shipments to
the buyer in respect of whom the policy is issued will have to be covered (with a provision to
permit exclusion of shipments under LC). These policies can be availed of by
(i) exporters who do not hold SCR Policy and
(ii) by exporters having SCR Policy,
In case all the shipments to the buyer in question have been permitted to be excluded from the
purview of the SCR Policy.
What are the different types of BP (ST)?
Buyer wise (commercial and political risks) Policy - short-term
Buyer wise (political risks) Policy - short-term.
Buyer wise (insolvency & default of L/C opening bank and political risks) Policy - short-term

For Dos and Donts of PolicyClick here
What are the different risks covered under BP (ST)?
Commercial risks: [For BP-ST policies of the Buyerwise (commercial and political risks) Policy -
short-term ]
Insolvency of the buyer
Failure of the buyer to make the payment due within a specified period, normally four
months from the due date.
Buyer's failure to accept the goods (subject to certain conditions).
Political risks: [For all the BP-ST policies]
Imposition of restrictions 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;
Interruption of voyage outside India resulting in payment of additional freight or insurance charges
which cannot be recovered from the buyer;
Insolvency & default of LC opening bank [For BP-ST policies of the Buyerwise (insolvency &
default of L/C opening bank and political risks) Policy - short-term.]
Insolvency of the L/C opening bank;
Failure of the LC opening bank to make the payment due within a specified period, normally four
months from the due date;
What are the risks not covered under BP (ST)?
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
favor;
Causes inherent in the nature of goods;
Buyer's failure to obtain necessary import or exchange authorization from authorities in his
country;
Loss or damage to goods;
Exchange rate fluctuation;Failure of the exporter to fulfill the terms of the export contract or
negligence on his part.

What is the percentage of cover provided by BP (ST)?The percentage of cover normally
available under the policy would be 80% of the gross value of the shipments covered.
However, policy could also be issued with a lower percentage of cover with proportionate
reduction in the amount of premium payable.
Export Turnover Policy

Turnover policy is a variation of the standard policy for the benefit of large exporters who
contribute not less than Rs. 10 lacs per annum towards premium. Therefore all the exporters who
will pay a premium of Rs. 10 lacs in a year are entitled to avail of it.

In what respects is the turnover policy different from a standard policy? The turnover policy
envisages projection of the export turnover of the exporter for a year and the initial
determination of the premium payable on that basis, subject to adjustment at the end of the
year based on actuals. The policy provides additional discount in premium with an added
incentive for increasing the exports beyond the projected turnover and also offers simplified
procedure for premium remittance and filing of shipment information. It also provides for
higher discretionary credit limits on overseas buyers, based on the total premium paid by the
exporter under the policy. The turnover policy is issued with a validity period of one year. In
most of the other respects the provisions relating to standard policy will apply to turnover
policy.

Click here for Do's and Don'ts
Buyers Exposure Policies

Presently, in the policies offered to exporters premium is charged on the export turnover, though
the Corporations exposure on each buyer is controlled through a system of approval of credit limits
on the buyer for covering commercial risks. While this suits the small and medium exporters, many
large exporters having large number of shipments have been complaining about the volume of
returns to be filed under the policy necessitating the deployment of their resources for this
purpose and also resulting in possible unintentional omissions or commissions in such reporting,
which have an impact on the settlement of claims. There has been a demand for simplification of
the procedures as well as for rationalization of the premium structure. Considering the
requirements of such exporters, the Corporation has decided to introduce policies on which
premium would be charged on the basis of the expected level of exposure. Two types of exposure
policies one for covering the risks on a specified buyer and another for covering the risks on all
buyers- are offered.
Two types of Exposure policies are offered, viz,
(i)Exposure (Single Buyer) Policy for covering the risks on a specified buyer and
(ii)Exposure (Multi Buyer) Policy for covering the risks on all buyers.
What does an Exposure (Single Buyer) Policy cover?
An exporter can choose to obtain exposure based cover on a selected buyer. The cover would be
against commercial and political risks attached to the buyer for both non-LC and LC transactions. A
separate Buyer Exposure Policy will be issued for each buyer covering all the exports to be made to
the buyer during a period of twelve months. If the exporter has opted for commercial and political
risks cover, failure of the LC opening bank in respect of exports against LC will also be covered, for
the banks with World Rank (WR) up to 25,000 as per latest Bankers almanac. For covering any bank
with ranking beyond that level, the exporter has to obtain specific approval from the branch, which
issued the policy prior to making the shipment. For covering the political risks only, in respect of LC
transactions or shipments to associates, Buyer Exposure policy with endorsement restricting the
cover to political risks only with significantly less premium is offered. This policy can be availed by
exporters holding Standard Policy in respect of any of their buyers. Shipments to the buyers
covered under Buyer Exposure Policies would be excluded from the purview of the Standard Policy.
Risks covered would be same as covered under the existing Buyerwise Policy.

For Dos and Donts
Single BuyerClick Here
Multi Buyer Click Here
Exporters can take cover for an Aggregate Loss Limit (ALL) on all their buyers to whom they propose
to sell on credit terms in open cover countries. While accepting the proposal, the Corporation
would expect the ALL sought to be not less than 10% of the past 12 month turnover applicable for
the categories/countries for which cover is sought.
The policy would be issued for a period of one year.
Cover would be available for exports to the buyers in countries listed under open cover
category as long as the buyer is not in List of Overseas Buyers on whom adverse notice is
received maintained by the Corporation and available to the exporters having on-line facility
and posted on its website www.ecgcindia.com.
If the transaction is on LC terms, failure of the LC opening bank in respect of exports against
LC will also be covered, for banks with World Rank up to 25000 as per latest Bankers
Almanac.
Cover in respect of exports to restricted cover countries would not be available under this
policy.
Loss limit in respect of export to any individual buyer/bank will, however, be restricted to
10% of the ALL.



Premium at the rate of 275 paise per Rs.100/- is payable on the ALL fixed to cover all shipments to
be made during the Policy year.
The risks covered, percentage of loss, payment of premium, declaration of turnover,
enhancement of ALL, overdue declaration, extension in due date, claim etc will remain the
same as Exposure (Single Buyer) Policy.
The exporter has to apply in the prescribed proposal form along with the non-refundable
policy fee of Rs.5, 000/-.
Consignment Export Policies
(Stockholding agent and Global entity)

Credit Insurance PoliciesConsignment Exports Policy
(Stockholding Agent and Global Entity)
Economic liberalization and gradual removal of international barriers for trade and commerce are
opening up various new avenues of export opportunities to Indian exporters of quality goods. One
of the methods being increasingly adopted by Indian exporters is consignment exports where the
goods are shipped and held in stock overseas ready for sale to overseas ready for sale to overseas
buyers,as and when orders are received. To protect the Indian Exporters from possible losses when
selling goods to ultimate buyers, it was decided to introduce Consignment Policy Cover.There are
two policies available for covering consignment export viz;.
--Consignment Exports (Stock-holding Agent)
--Consignment Exports (Global Entity Policy)
Under what circumstances, Consignment Exports (Stock Holding Agent) Policy cover can be
availed of?
A consignment Exports (Stock-holding Agent) Policy will be appropriate for each exporter stock
holding agent combination provided the following criteria are satisfied.

Merchandise are shipped to an overseas entity in pursuance of an agency agreement;
The overseas agent would be an independent and separate legal entity with no associate/sister
concern relationship with the exporter;

The agents responsibilities could be any or all of the following, viz., receiving the shipment, holding
the goods in stock, identifying ultimate buyers and selling the goods to them in accordance with the
directions, if any, of his principal (exporter); and

The sales being made by the agent would be at the risk and on behalf of the exporter (whether or
not such sales are in the agents own name or otherwise) in consideration of a commission or some
similar reward or compensation on sales completed.
For Dos and Donts of the policy
--- Global EntityClick Here
--- Shareholding AgentClick Here



The various combination of risks that can be covered under the consignment Exports (Stock-holding
Agent) Policy at the option of the exporters are:

Commercial risks on both stock-holding agent and ultimate buyers with political risks for the entire
period;

Commercial risks on the ultimate buyers only with political risks for the entire period;

Commercial risks on the stock-holding agent only with political risks for the entire period; and

Only political risks for the entire period.
What the combination of risks which can be covered under Consignment Exports (Global Entity)
Policy?
The combinations of risks which can be covered under the Consignment Exports (Global Entity)
Policy are:

Commerical risks on the ultimate buyers only with political risks for the entire period;

Only political risks for the entire period.However, in those cases where the intermediary is an
associate of the exporter and both the exporter and the associate are joint stock companies with
the exporters share in the capital of the associate not exceeding 49%, the following combinations
of risks can also be covered:

Insolvency of the global entity and commercial risks on ultimate buyers with political risks for the
entire period.

Insolvency of the global entity with political risks for the entire period.

Service Policy

Where Indian companies conclude contracts with foreign principals for providing them with
technical or professional services, payments due under the contracts are open to risks similar to
those under supply contracts. In order to give a measure of protection to such exporters of
services, ECGC has introduced the Services Policy.
What are the different types of Services Policy and what protection do they offer?
Specific Services Contract (Comprehensive Risks) Policy;
Specific Services Contract (Political Risks) Policy;
Whole-turnover Services (Comprehensive Risks) Policy; and
Whole-turnover Services (Political Risks) Policy
Specific Services Policy, as its name indicates, is issued to cover a single specified contract. It is
issued to provide cover for contracts, which are large in value and extend over a relatively long
period. Whole-turnover services policies are appropriate for exporters who provide services to a
set of principals on a repetitive basis and where the period of each contract is relatively short. Such
policies are issued to cover all services contracts that may be concluded by the exporter over a
period of 24 months ahead.
The Corporation would expect that the terms of payment for the services are in line with customary
practices in international trade in these lines. Contracts should normally provide for an adequate
advance payment and the balance should be payable periodically based on the progress of work.
The payments should be backed by satisfactory security in the form of Letters of Credit or bank
guarantees.


Services policies are designed to cover contracts under which only services are to be rendered.
Contracts under which the value of services to be rendered forms only a small part of a contract
involving supply of machinery or equipment will be covered under an appropriate specific policy for
supply contracts.

For Dos and DontdClick here
Software Project Policy

The Services Policies of the Corporation which have been in existence for some time were
offered to provide protection of exporters of services including software and related services.
However it was found that the general services policy does not meet with the exact
requirements of software exporters. It was therefore decided tointroduce a new credit
insurance cover to meet the needs of the software exporters, namely, software projects
policy, where the payments will be received in foreign exchange. The general services policies
will continue to be offered for the export of services other than software and related
services.

What are the software services exports that will be eligible for cover under the Software
Project Policy? The following software services will be eligible for cover under the Software
Projects Policy: Software project services, either on one time/turnkey basis or
progressive/milestone basis, involving
Development of software off-shore (i.e. at the exporters location in India) to be delivered and
implemented in the buyers (client) location; or
Development of software on-site of the client and supply and implementation; or
Both off-shore and on-site development.
What are the salient features of Software Projects Policy? Considering that software projects have
special characteristics, the following features have been introduced in the Software Project Policy:
Instead of monthly declaration, exporter would be required to submit a progress report indicating
the level of completion, payment sought and payment received and deviations in these areas.
The exporter has to specify in advance the manner in which the work in progress would be
estimated (namely, the reports that would be available on the volume of work done and the rate to
be applied on the defined unit to arrive at the work done - it could be a document giving the man
hours spent and rate per man hour or it could be a simple number of days worked and rate per
day).
Liability of the Corporation would be only for the work reported in the progress report.
The Corporation will have the right to examine the books of accounts and other documents of the
exporter either on its own or through an authorized agency prior to admission of claim.
Certification by banks may be dispensed with in cases where it is felt that it is not possible.
The contract should provide for a clear acceptance mechanism in respect of services rendered and,
if possible, a procedure for arbitration. It should also provide for rectification of mistakes errors
and also omissions. The Corporation would not cover any loss due to errors or omissions.
Loss coverage will be restricted to 80% as there is no salvage possibility.
Apart from stipulating the loss limit on the buyer, the policy document would also specify the limit
up to which the losses are covered under other risks.

What are the risks covered under the Software Projects
Policy?The risks covered under the Policy would be similar to the
risks covered under standard policies in character but the wordings
are slightly amended to be in line with the special features of the
software exports. The risks covered would be as under:

Commercial risks:
Default the failure of the customer to pay to the exporter within
four months after the due date of payment the contract price of
services rendered to and accepted by the customer: or
Insolvency of the customer: or
Wrongful repudiation of the contract by the customer after the
exporter has incurred expenses for commencement of services.
Political risks:The operation of a law or of an order, decree or regulation having the force of law,
which, in circumstances outside the control of the Exporter and/or of the buyer prevents, restricts
or controls the transfer of payment from the customers country to India: orThe occurrence of war
between the customers country and India: orThe occurrence of war, hostilities, civil war, rebellion,
revolution, insurrection or other disturbances in the customers country; orThe imposition in India
or in the customers country after the date of contract, of any law or of an order, decree or
regulation having the force of law, which in circumstances outside the control of the Exporter and/
or the customer, prevents performance of the contract; orAny of the following causes of loss not
being within the control of the exporter and/ or the customer which arises from an event occurring
outside India;Refusal of visa for employees of exporter who are required to be in the place of the
project to enable the exporter to execute contractual obligations for reasons not attributable to the
exporter or customer.Unjustified restraining of personnel of the exporter by authorities in
customers country.Increase in any tax or introduction of a new tax payable by the exporter in the
customers country, which is not recoverable from the customer.Imposition by a competent court of
law or the government, a rule or law or an order which results in losses / additional costs due to
infringement of Intellectual Property Rights (IPR) of a process or software which was either in the
domain of free software or the IPR was not established on the date of contract.Variation in
exchange rates between Indian rupee and foreign currency concerned beyond three percentages
over the stipulated level resulting in loss to the exporter for contracts involving service beyond 360
days.The losses due to the risks described under (e) above would be covered by the Corporation
subject to a maximum of 25% of the value of export.

IT-enabled service (Specific customer)
Policy


Construction Works Policy


Specific Policy for supply contract


Insurance Cover for Buyers credit and
Line of credit

Small and Medium Exporters Policy