What is export credit insurance?
Updated: 2026-10-16
Short answer
Export credit insurance protects exporters against specified losses when foreign buyers fail to pay. Depending on the policy, it may cover commercial risks such as insolvency or prolonged default and certain political risks that prevent payment. Coverage is conditional, and exporters must follow the policy's eligibility requirements, limits, exclusions, and claim procedures.
What Is Export Credit Insurance?
Export credit insurance is a risk-management product for businesses selling goods or services to overseas customers on credit. It protects eligible foreign accounts receivable against certain non-payment events. If a covered buyer defaults and the exporter meets the policy conditions, the insurer may compensate the exporter for an agreed portion of the qualifying loss.
What Risks Can It Cover?
Policies may cover commercial risks, such as buyer insolvency or prolonged non-payment, and selected political risks, such as specified conflict-related events or restrictions on transferring currency. Exact cover varies by insurer, destination country, buyer, product, payment terms, and policy type. An exporter should not assume that all disputes, shipment problems, contract breaches, or unpaid invoices automatically qualify for compensation.
How Export Credit Insurance Works
The exporter applies for coverage and provides information about the buyer, transaction, payment terms, and expected sales. The insurer determines whether the buyer and transaction are eligible and sets applicable limits and conditions. After an insured sale is made, the exporter follows the policy's reporting, invoicing, and premium requirements. If payment is not received, the exporter must notify the insurer as required, take any specified recovery steps, and submit supporting documents. The insurer assesses the claim under the policy before determining any payment.
Benefits and Limitations for Exporters
Export credit insurance can help exporters offer credit terms to overseas buyers, enter markets with greater confidence, and reduce the financial impact of qualifying non-payment. Insured receivables may also help a business obtain financing, subject to the lender's requirements. However, insurance costs money and usually covers only defined risks and a specified share of loss. Exporters should review deductibles or uninsured portions, buyer limits, exclusions, waiting periods, and claim obligations before choosing a policy.
How to Explore Export Credit Insurance
Compare insurers and export credit agencies that serve your country and business size. Ask whether coverage is available for a single buyer or a wider customer portfolio, what percentage of loss may be covered, which countries and payment terms are eligible, and what documentation is required. Confirm the policy's price and limitations against the risks in your export contracts. For an overview, see https://www.trade.gov/export-credit-insurance and https://www.exim.gov/solutions/export-credit-insurance.