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Trade Credit Insurance

Protect Your Domestic & Foreign Receivables

If you are an exporter or supplier of goods or services and you wish to protect against the loss of your  domestic and foreign receivables, our Trade Credit Insurance (TCI) is an option for you. This protection is strongly recommended if you are entering into new markets, developing new customer relationships, or simply looking to 'smooth out' your cash flows from having extended credit terms to your buyers.

Trade Credit Insurance covers both foreign and domestic receivables against commercial and political risks of non-payment by buyers. Commercial risk is automatic, however coverage of political risk attracts an additional premium.  The facility is available only to companies registered in Jamaica.

Types of Risks Covered

Commercial Risk: Risk of non-payment as a result of bankruptcy/insolvency of buyer, the buyer’s repudiation of the debt or the buyer’s protracted default

Political Risk:  Risk of non-payment for political reasons, e.g. war/civil disturbance, exchange transfer, cancellation of import/export licence

Eligible Transactions

  • Export sales of goods and/or services
  • Domestic sales of goods only.
  • 3rd country sale of goods originating outside of Jamaica, on behalf  of Jamaican companies
  • Sale of goods only supplied by subsidiaries of Jamaican companies  located and operating within CARICOM
  • Sale of goods transhipped from Jamaica’s duty-free zones to countries within the Caribbean region

Percentage Cover

Commercial cover EXIM Bank covers 85%, the Insured bears the remaining 15%
Political cover EXIM Bank covers 90%, the Insured  bears the remaining 10%

How Premium Rates are Determined
Policyholders are assigned a single composite rate covering commercial risk for both the export and domestic markets. This composite rate is determined by buyers’ creditworthiness and country risk ratings.  Basic Premium Rates  range between J$0.54 – J$0.60/J$100.00 of gross invoice value of each shipment.  Political cover attracts an additional rate that may range between J$0.03 – J$1.45/J$100.00.

It is also a financing tool…
Not only does Export Credit Isurance (ECI) protect you against the non-payment of receivables by your foreign buyers, but the policy can also be used as collateral when applying for post-shipment working capital financing – Insurance Policy Discounting Facility (IPDF).

BRIDGE FINANCING FOR INSURED RECEIVABLES
All policyholders can apply for post-shipment financing of 80% of invoice value of all eligible transactions, where the policy is used as collateral.  Loans will be available for 120 days at our attractive and competitive interest rates.

Speak with any of our Credit Analysts at 630-1400 to find out more about Trade Credit Insurance  and learn how you can protect your receivables against non-payment as well as how to access working capital.