Guidance

How to Access Export Credit Insurance: a guide for brokers and exporters

Updated 24 April 2024

1. How to use this guide

This document is designed to help exporters and brokers understand the credit insurance cover provided by UKEF and how this can benefit exporters.

It gives an overview of UKEF’s Export Insurance Policy and explains how exporters and brokers can access and manage this insurance policy.

It also aims to answer common questions relating to the Export Insurance Policy, as well as highlight the support that can be provided by UKEF’s national network of Export Finance Managers (EFMs).

2. What is the Export Insurance Policy?

UKEF’s Export Insurance Policy (EXIP) is an insurance policy extended to UK exporters to protect them against the risks of non-payment under an export contract, of the buyer breaching its obligations and terminating the contract (including wasted costs), or of being unable to perform the contract because of the occurrence of a political event.

2.1 Benefits for exporters

In addition to the usual benefits of credit insurance, the EXIP has many benefits for clients.

The EXIP Policy:

• provides exporters with certainty of payment
• provides insurance for markets that private insurers may not be able to cover
• can cover single risks so an exporter can cover individual export contracts
• can facilitate access to finance; for instance, EXIP can include the name of a loss payee, to whom valid claims will be paid. This can reassure a lender and enable them to provide finance facilities to an exporter

2.2 Benefits for brokers

The benefits of introducing EXIP to exporters, include:

• enhancing and reinforcing a broker’s credentials as a credit-insurance market specialist
• demonstrating added value to clients and prospective clients in circumstances where the private market is unable to support specific export risks
• receiving a broker’s commission of 15% of the premium payable by the client to UKEF. The cost to the exporter is unaffected

2.3 Coverage

The EXIP protects the exporter from losses incurred under insured export contracts resulting from:

• losses incurred prior to shipment of goods, during the pre-credit period
• insolvency and non-payment by the buyer of any sum due under the contract, often called “credit risk”
• any act or omission on the part of the buyer which terminates, or has the effect of terminating, the contract
• any act or administrative decision by a government, or other political event which prevents the performance of the contract, such as war, expropriation of assets, import/export restrictions or currency transfer restrictions

The policy insures up to a maximum of 95% of any amount due under an export contract or multiple export contracts.

For most consumer goods, raw materials and services the usual maximum credit period covered is six months, but where appropriate, the length of the credit period can be longer.

Contracts covered can take the form of a single document, or be comprised of a written order from the buyer and written acceptance of the order by the exporter.

The EXIP can cover:

• one-off contract with a single customer under which there may be one or more shipments (Single Contract Policy)
• repeat contracts with one or more shipments to a single buyer over a defined period (Multiple Contract Policy)
• there are no maximum or minimum amounts that can be covered
• most sectors or type of business, provided that relevant licencing requirements are fulfilled

For more information see the Export Control Joint Unit’s website, or speak to one of our EFMs.

2.4 Eligibility Criteria

Exporters interested in taking out an EXIP with UKEF must meet the following eligibility criteria:

• the exporter must be carrying on business in the UK (including the Isle of Man or the Channel Islands) and have an established place of business in the UK.
• the buyer must be carrying on business overseas.
• the exporter must be unable to obtain credit insurance from the private market.
• the export contract must have a minimum of 20% UK content

Please speak to your EFM for more information about markets in which we can support transactions.

2.5 Currencies

The policy can be expressed in pounds sterling, US dollars, euro or yen, or other major currencies. Premiums and claims are paid in the currency of the policy. Please contact your local Export Finance Manager (EFM) for more information about currencies supported.

2.6 Eligible countries

In line with the COVID-19 pandemic, the list of eligible countries was temporarily expanded under the EU State Aid temporary framework.

This has now reverted and we are unable to support credit insurance business with a horizon of risk of less than 24 months in:

• all EU member states
• Australia
• Canada
• Iceland
• Japan
• New Zealand
• Norway
• Switzerland
• USA

2.7 Starting point of coverage

Single contract policies

Cover is in place from the date that both the exporter and UKEF have signed the policy document and any premium due has been received by UKEF.

Multiple contract policies

Following policy signature, cover is in place when a declaration relating to an individual contract has been received and premium has been paid prior to the supply of goods or services. For more information, see the Multiple Contract policies section under Ongoing Management.

2.8 End point of coverage

The policy schedule sets out an end date, after which any event that gives rise to a loss will not be covered. The end date is based on the length of the insured export contract and is usually set six months after the date that final payment is due from the buyer.

2.9 What is not covered?

Where a dispute exists between the exporter and the buyer in respect of an amount due under the contract, the exporter will usually need to resolve the dispute or obtain an arbitration award or a court judgement in its favour before a claim will be considered.

The EXIP does not cover risks incurred during transportation. Transportation risks would typically be covered by the incoterms agreed for the contract. Learn more about incoterms.

The EXIP does not cover exports to more than one buyer, under one policy. As the EXIP is a single buyer policy, there must be a separate policy for each buyer.

2.10 Can the buyer be another company in the UK, in circumstances where the goods supplied to the buyer are themselves destined for export as part of a larger overall project?

No. UKEF is not able to consider cover for this structure.

2.11 Can insurance be provided when an exporter has already shipped goods/provided services?

It may be possible to cover such transactions provided the exporter is not aware of anything likely to cause a loss, the due date for payment has not passed, and the other policy terms have been satisfied.

2.12 Can the exporter be owned by a non-UK company with a UK operation?

Yes, provided that the exporter is carrying on business in the UK and has an established business location there. Foreign ownership or foreign shareholding is not a barrier to eligibility.

2.13 Can the policy cover a situation where the goods are going to, or payment coming from, a country other than the buyer’s country?

Yes. UKEF will consider each case and full details of the transaction should be given with the Proposal Form.

2.14 Can the policy cover sales made to a subsidiary in an overseas market or sales made by that subsidiary in the market?

UKEF can consider cover for sales made to the overseas subsidiary of a UK company for financial loss incurred as a result of the occurrence of a political risk only. Loss resulting from commercial risks would be excluded.

UKEF is unable to insure the sales made by the overseas subsidiary as policies can be issued only in respect of exports from the UK.

However, where the UK exporter has a contract with its overseas subsidiary on a “pay when paid” basis, UKEF can cover non-payment by the overseas end buyer.

2.15 Under the export contract, some goods and services are being supplied from outside the UK. Is this eligible for support?

UKEF operates a foreign content policy which means it can also support supplies under the export contract with an overseas buyer (that the exporter is responsible for) that are sourced from an overseas country and shipped directly to the buyer.

Under the policy, up to 80% of the value of an export contract can be made up of goods/services provided by suppliers outside the UK. A minimum of 20% of the value of an export contract must always be of UK content. Foreign content imported into the UK and used as part of the manufacturing process is treated as UK content.

Learn more about UKEF’s approach to foreign content.

3. Application process

The broker’s role is to advise their clients on the private market and the options available to them. If cover is unavailable in the private market, UKEF is happy to receive EXIP enquiries and applications either directly from an exporter or from an eligible broker.

Approved list of brokers

See the full list of approved brokers. If you wish to register to become a broker, please contact us at [email protected].

If a broker or exporter is interested in informally discussing the potential for support, they can contact their local UKEF Export Finance Manager for early-stage guidance on whether it is worth proceeding with an application.

The current availability of cover can be checked on the UKEF website under country cover.

Applications are free. The premium is determined on a case-by-case basis and there is no minimum premium for the exporter to pay.

3.1 Non-Binding Indication – An early indication of support, without buyer’s assessment

A request can be made for a Non-binding Indication of support and indicative pricing for a specific market, whereby the exporter fills out a one-page form containing information about the buyer, market and the required length of credit. UKEF in turn outlines its appetite to issue cover and gives an indication of a premium rate.

This can usually be provided within 48 hours. It will not include an assessment of the buyer and is entirely without commitment.

3.2 Proposal Form

To take things further, the exporter should complete a Proposal Form providing more in-depth information about the business and the particular export transaction they would like to cover, detailing, for example, the name and address of their buyer, the products/services to be supplied, contract value and payment terms.

The exporter should provide a fair presentation of the risk to include all material facts and circumstances. The more information that the exporter can provide, particularly on the buyer and any trading history between them, the quicker and more straightforward UKEF’s risk assessment and underwriting process is likely to be.

The completed form should be emailed to: [email protected].

3.3 Risk assessment

UKEF will check the eligibility criteria, the availability of cover for the market, and undertake background research on the buyer, using this to assess whether it has the appetite to provide insurance on the terms outlined in the Proposal Form.

Typically, this assessment and other background checks can take up to two weeks to complete for a straightforward case. During this period, UKEF aims to work closely with the broker/exporter, communicating where gaps in information may exist and encouraging these to be filled where possible.

3.4 Buyer Risk Assessments

UKEF undertakes its own assessments of Buyer Risk. Trading history and financial information such as accounts provided by the exporter will speed up the process.

The same trade credit underwriting factors used in the commercial insurance market are considered, such as the exporter’s experience, and the buyer’s trade sector and financial performance. Our role is not to take on poor credit risk; we judge our risks carefully, but UKEF is not risk averse.

3.5 Accepting the offer

If the broker or exporter confirms that they wish to go ahead, UKEF will complete the underwriting process and, assuming the risk is still acceptable, send the broker and exporter a pack containing an official offer of cover, with a full policy document and a schedule specifying the premium rate to be applied. The broker will go through this document with the exporter, discussing all the relevant implications and requirements.

If the exporter is happy to accept the offer, they should sign the EXIP where indicated and return it to UKEF, either directly or via the broker.

Once the policy has been countersigned by UKEF, and any declaration received and premium paid, cover is in place. A countersigned copy is sent to exporter and broker.

3.6 Payment of premium

Single contract policies

In the case of single contract polices, the exporter should pay the premium that is shown on the policy schedule at the time of accepting the EXIP. Account details for payment are included in the policy.

Multiple contract policies

The multiple contract policy is designed to cover repeat business with the same buyer over a period of usually 12 months.

For multiple contract policies, the exporter should declare each contract to UKEF separately and calculate for itself the premium due by reference to the premium rate on the policy schedule. Payment should be within 14 days of the date of each contract declaration. The premium should be paid before the goods are despatched or the services are performed.

UKEF will not issue an invoice requesting payment of premium. Account details for payment are included in the policy. Learn more about our multiple contract policy.

3.7 What happens if the application is rejected?

In such cases, UKEF will inform the broker/exporter as soon as practicable and give reasons where possible. UKEF can be requested to reconsider a declined application.

3.8 How long does it take UKEF to assess the application?

UKEF can usually provide an initial Non-binding Indication (NBI) of support without buyer assessment for the market and an estimate of premium rate within 48 hours.

For a full EXIP application, from start to finish, it typically takes two weeks to make an offer of cover, but much depends on how quickly UKEF can obtain enough information on the buyer upon which to make an assessment.

3.9 The exporter uses an agent. Does this matter?

UKEF performs due diligence on all the parties to the transaction, including any agent involved.

UKEF is committed to deterring bribery and corruption, and safeguarding taxpayer funds by taking all precautions that are reasonable and proportionate in the circumstances to avoid loss through becoming involved in export transactions tainted by bribery (and other financial crime). UKEF undertakes rigorous due diligence including checks against financial crime, bribery and corruption, prior to any support being provided.

The level of due diligence undertaken on transactions will be informed by the specific circumstances of each transaction and the level of inherent risk posed by factors such as the industrial sector and the use of an agent, and the jurisdictions concerned. This will ensure that the due diligence is reasonable and proportionate to the circumstances of each transaction.

UKEF requires all applicants to complete a Proposal Form, which includes making declarations in respect of the award of the Contract and financing in relation to financial crime. Applicants must also declare whether an agent has acted in relation to the export contract or any related agreement when seeking support. Whilst the use of agents is a legitimate, and common, business practice, where an agent is involved in a transaction, UKEF may be required to undertake additional checks, which can lengthen the response time.

4. Ongoing management

4.1 All Policies

Once the EXIP has been signed and the insurance cover is in place, the broker has a key role to play in advising the exporter about the operation of the policy and the ongoing requirements and responsibilities.

The broker should aim to keep in regular contact with the exporter and remind them of the need to alert UKEF to anything that may affect the risk.

UKEF will support the broker in their role wherever possible, providing information, clarification and other assistance as the circumstances require.

The EXIP is not an automatically renewable policy. At the end of the policy period if further cover is required and still unavailable in the private market, the broker can help the exporter make a fresh application.

An exporter insured under the EXIP also has the following responsibilities:

• to comply with the terms of the insured export contract, including obtaining necessary consents and approvals for its performance
• to ensure UKEF receives a fair presentation of the risk
• to take all possible steps to prevent or minimise any loss, chasing up debt whenever possible
• not to take any action that jeopardises their right to be paid, or UKEF’s right to recover money in the event of a loss
• to provide any information that UKEF might request regarding the export contract

The exporter must notify UKEF of:

• any changes to the export contract, such as changes in goods supplied or terms of payment, since these will require the written consent of UKEF in advance unless variations are permitted and set out in the policy
• any act, omission, event or circumstance which indicates that the buyer may not pay a sum due (within 15 days of becoming aware)
• any failure of the buyer to pay a sum due under the insured export contract within 30 days of the due date, unless otherwise stated in the policy
• any changes that may affect the information upon which UKEF based its decision must be notified. Changes which take the business outside the eligibility criteria, such as a reduction in UK content below 20%. Failure to do so might affect the validity of the cover

If in doubt as to whether a change in circumstance may affect the policy – always notify. UKEF can be contacted via [email protected].

The following is good practice when operating an EXIP:

• nominate an individual in the company to be responsible for operating the EXIP and ensure all those involved are aware of its existence and main requirements
• keep a record of due dates of payment and maintain trading experience with the buyer in a format which can be easily retrieved
• keep all contract and transaction documents, particularly purchase orders and acceptances, invoices, bills of lading and delivery notes
• keep all correspondence with the buyer, including any evidence of debt chasing, as this may be required to support a claim

4.2 Multiple Contract policies

If an exporter has a multiple contract policy covering repeat business with a buyer for a period of time called the eligibility period (usually 12 months), they should notify UKEF of each contract to be insured as and when it arises by completing the Declaration Form, which is at the back of the multiple contract version of the policy, and sending it to [email protected].

The purpose of the Declaration Form is to provide details of the contract, make the appropriate warranties and calculate the premium to be paid before the goods are despatched or services are performed.

Receipt of the Declaration Form and premium payment is a prerequisite for UKEF providing cover for a particular contract.

Under policies for multiple contracts, no further contracts may be insured while any amount is overdue by more than 30 days, or other period as stated in the policy. Goods despatched or services performed under further contracts will be at the exporter’s own risk.

The eligibility period can be amended with notice (usually 30 days), for example to an earlier date, but this will not affect contracts already insured.

4.3 Does the exporter need to insure the full value of a transaction with UKEF?

The exporter is not obliged to insure all its business with the buyer with UKEF.

The exporter may therefore have a larger total amount outstanding for payment than is insured under the policy.

The exporter should bear in mind the multiple contract policy recognises that amounts may be appropriated by the buyer to specific invoices. Unappropriated amounts are allocated against insured contracts in priority to other outstanding debts.

UKEF will never pay out more than the maximum liability stated in the policy.

Export Insurance Policies can be amended (for instance, the credit limit be increased) during the policy period. Just speak to your broker or EFM for more information.

5. Fees, premiums and excesses

There is no charge to make an application.

EXIP premium is determined on a case-by-case basis and there is no minimum premium for the exporter to pay.

The market, the length of time we are on risk and status of the buyer are all factors which influence the premium rate.

The EXIP does not contain excesses or deductibles, although UKEF does expect the exporter to take some share of the financial risk of non-payment. We achieve this by specifying an insured percentage of up to 95% of the insured contract value, leaving the balance to be borne by the exporter.

5.1 How much brokerage commission does UKEF pay, and at what point?

Brokerage is paid when UKEF has received the correct amount of premium due from the exporter.

UKEF does not pay fees for introductions. Brokerage commission of 15% is paid for broking services provided to the exporter including advice and guidance on the credit insurance market and UKEF’s EXIP, plus continuing support during the life of the policy. The cost to the Exporter is unaffected.

6. Potential losses, claims and recoveries

6.1 Overdue payments

UKEF recognises that sometimes buyers pay late. The EXIP requires notification to UKEF of an overdue payment within 30 days (or other notification period set out in the policy) of the due date of payment being missed.

6.2 Potential losses

If the exporter becomes aware of any event likely to cause loss, they should notify UKEF as soon as possible and in any case within 15 days. UKEF can be notified via [email protected].

Notification of non-payment of a sum due under an insured contract should be given within 30 days of the due date for payment being missed. UKEF will need regular updates on progress made in chasing the debt.

The broker is well placed to advise the exporter on the circumstances that warrant notification.

6.3 Making a claim

For UKEF to be able to reimburse an exporter in the event of non-payment from the overseas buyer, there must be a valid claim.

The exporter may submit a claim at any time:

• for non-payment of a sum due under the insured export contract that has remained unpaid for a period of six months during the “credit period”
• for costs incurred under the insured export contract, before the goods or services are supplied, if the buyer terminates the contract or a political risk occurs during the “pre-credit” period. This only applies if pre-credit cover is included in the policy

Unless UKEF agrees otherwise, the exporter would need to obtain at their own expense an arbitration award or court judgement in their favour to support a claim where:

• a dispute exists concerning the buyer’s obligation to pay sums due
• an act or omission of the buyer terminates a contract

Requests for, and completed forms, should be sent to [email protected].

Claims submitted later than 12 months after the end date given in the policy schedule will not be accepted.

6.4 Managing the claim process

The broker can help the exporter manage the claim process. The exporter should make every effort to pursue the debt and minimise the loss but if it becomes clear that payment will not be forthcoming, in order to make a claim they should request and complete an EXIP claim form. The completed form should be sent back to UKEF along with the required supporting documentation.

Claims are to be sent to [email protected].

6.5 Insuring future contracts

Under a single contract policy, cover for the contract remains in place irrespective of late payment, but the exporter is under an obligation to prevent or minimise loss or take such steps as are required by UKEF at that time.

Under a multiple contract policy where any amount is overdue under any contract between the exporter and the buyer (whether insured or not) beyond the notification period in the policy, UKEF will not insure further contracts until such time as the overdue amount has been paid.

6.6 Paying a claim

Once a claim is received, UKEF will examine it, asking the broker or exporter questions or further information where necessary to build a complete picture. On acceptance of a valid claim, UKEF will pay the exporter the insured percentage of loss, up to the maximum liability stated in the policy document.

Usually, the earliest point at which a claim can be paid is six months after the due date of payment by the buyer. This so-called “claims waiting” period may be reduced if a court order can be obtained for instance, evidencing the insolvency of the buyer. The terms of cover that UKEF can offer for very difficult markets may require a longer period than six months to allow more time for payments to be made. This will be stated in the policy.

The broker can play a pivotal role in supporting the exporter during this process, reminding them of their responsibilities in chasing the debt, keeping UKEF informed of progress and developments and assisting the exporter with the submission of claims.

6.7 Recoveries

Under the multiple contract policy, before a claim is paid UKEF recognises that amounts may be allocated by the buyer to specific invoices. Unallocated amounts go towards reducing any potential claim under an insured contract.

After a claim has been paid any recoveries of outstanding debt will be shared between UKEF and the exporter. UKEF will receive the insured percentage of a recovery (usually 95%) and the exporter will receive the remainder.

UKEF will reimburse the insured percentage of any expenses which the exporter has incurred in acting to minimise any loss at the direction of UKEF.

7. Ending the Policy

There is no penalty if an insurer no longer wishes to insure the contract, but it is good practice to inform UKEF as soon as practically possible.

7.1 Ending a Multiple Contract Policy

If the exporter no longer wishes to use a multiple contract policy, for example if the broker has found cover is now available in the private market, the exporter can simply cease to declare new contracts, but we would appreciate being informed. Please contact us on [email protected].

7.2 What if cover is still required at the end of the eligibility period under a multiple contract EXIP?

If cover is still unavailable in the private market, the exporter can apply for a new EXIP.

7.3 What happens when UKEF withdraws cover?

UKEF tries to remain on cover. There are very few incidences where cover has had to be withdrawn. If the Exporter is concerned about a Buyer’s ability to pay, and therefore cover being removed, they should consult UKEF at the earliest opportunity. For single contract EXIPs cover will not be withdrawn once the premium is paid.

Multiple contract EXIPs have an eligibility period, usually of 12 months, during which new contracts can be declared and become insured under the policy. UKEF has the right to give 30 days’ notice of an earlier end to the eligibility period meaning that no new contracts can be declared after that date.

Any contracts insured before the date notified are not affected. An exporter therefore has 30 days from being told of the earlier end to the eligibility period in which to make necessary arrangements.

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