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Insurance of manufacturing risk (Product E)

Insurance of manufacturing risk (Product E)

Insurance of manufacturing risk protects you against a case when a foreign buyer cancels a contract before you send the goods. You avoid the risk that goods manufactured especially for the client would by cancellation of a contract lose their value. You, or the Slovak exporter, are the insured in this case.

It is possible to agree on the insurance only as supplementary insurance to subsequent insurance of loan risk (products A, B, C, D).

Advantages for the exporter

  • By the Insurance of short-term export credits EXIMBANKA SR relieves the exporter from the commercial and political risks arising from the receivable.
  • Insurance of a manufacturing risk is advantageous for you especially in the case that you make a highly specialized product, exactly according to the requirements of a customer and its upon non-acceptance it loses its value or you would only with great difficulty be able to sell it to someone else.
  • It also ensures protection if you are preparing to export to a country in which there is a risk of political events, which could lead to the banning of imports or endanger the customer’s ability to meet the conditions of a contract.
  • Our experienced team will accompany you from the first contact during the entire duration of the contract. We offer you our long years of expertise in the field of export financing (risk analysis of the country, buyer, bank, impact on the environment, and others).

Frequently asked questions

When is such insurance most advantageous?
The insurance is not limited by sector and depends on you, i.e. the Slovak exporter, with what type of export you are interested in using.

What is the period of the insurance?
The insurance may be short-term (to 2 years) or mid-term and long-term (over 2 years).

What are the basic conditions of the insurance?
• Insurance of manufacturing risk is possible only as supplementary insurance to insurance products A, B, C, D with the exception of the case when the exporter has its own foreign purchasing agreement paid for goods in advance in the full amount, thus even before the sending of the goods.
• The amount of the deductible for an insured event is usually 15%
• Our mission is, among others, to support employment and the development of production capacities in Slovakia. For this reason the Slovak share in the export is an important criterion when assessing your project.

What kind of risks does the insurance cover?
The insurance is intended for non-marketable risks, i.e. those which commercial banks and insurance companies are not willing or not able to insure. The insurance covers:
• commercial risks – the risk of non-payment of a receivable, especially due to insolvency or payment unwillingness of the buyer; breaching of the export contract by the buyer,
• political risks – risk of non-payment of a receivable for political and administrative accidental or hard to foresee events in the country of the buyer, such as, e.g. war or other armed conflict, terrorism, unrest, strikes, revolutions, nationalization, embargo, the impossibility of transfer and others. Natural disasters, such as floods or earthquakes, are also included here.

How much will it cost?
The amount of the premium rate depends on several factors, such as the country of the foreign buyer, the credit of the foreign buyer, the length of the contract, the method of ensuring payments, delay of payments. The premium rate is assessed for each project individually.

How is the insurance paid for?
The insured party pays the premium party one time in the full amount. By payment of the premium the insurance policy acquires force.

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