Insurance of Short-Term Export Receivables for Small and Medium-Sized Entrepreneurs

If you are a small or a medium-sized entrepreneur and if your annual income from exports amounts to up to EUR 2 million, under this insurance programme, you can insure the risk of non-payment by your foreign buyer with whom you have arranged for up to 180-day deferred payment. The subject matter of insurance are money receivables arising from goods and/or services delivered and invoiced to foreign buyers.

 

How to enter into an insurance policy with HBOR?

A completed and signed insurance application form is submitted to HBOR together with creditworthiness report for a foreign buyer issued not more than three months before the date when application for insurance is submitted. Creditworthiness report for the foreign buyer is obtained by the exporter or by HBOR for and on behalf of the exporter. Upon the receipt of documentation, HBOR assesses the risk of the foreign buyer and issues an indicative offer for insurance. If the offered indicative terms and conditions of insurance are acceptable for the exporter, the procedure of further application processing and insurance policy execution is initiated.

Advantages of contracting insurance:

• Simple manner of providing cover against the risk of non-payment on the part of foreign buyers
• HBOR takes up to 95% of the risk of non-payment on the part of foreign buyers, which means that you protect your liquidity
• Strengthening of your competitiveness by being able to offer deferred payment to foreign buyers
• Easier access to new foreign markets
• HBOR pays indemnity in a short period of time
• Minimum administrative obligations towards HBOR during the lifetime of insurance policy
• Fixed price of insurance by a single insured foreign buyer

What risks are insured?

• Commercial risks (arrears in payment by foreign buyer, bankruptcy of foreign buyer, etc.)
• Political risks (war, rebellion or revolution and government measures limiting transfer or free disposal of assets)

What happens if an insured buyer is in arrears with payment?

Obligations of exporter:

• To suspend further deliveries to the foreign buyer
• To inform HBOR on the delay in payments no later than within 30 days from the maturity of the respective receivables
• To undertake activities, in an agreement with HBOR, for the purpose of collecting the respective receivables
• To submit to HBOR a claim upon the expiry of 3 months from the maturity of the respective receivables.

Obligations of HBOR:

• To process the applications no later than within 30 days
• To pay indemnity no later than within 15 days from the day when the decision on indemnity payment is made.

Costs of insurance

• One-off application processing fee is charged on the occasion of insurance policy conclusion
• Insurance premium is charged one-off on the occasion of insurance policy conclusion and it depends on the insured amount and the insurance duration

 

Insurance premium amounts are stated in absolute amounts and are paid on the occasion of insurance policy conclusion