UK Export Finance is the UK’s export credit agency. They help UK businesses realise their ambitions for international expansion, working to help them access the export finance they need to grow.
If you are planning to export goods or services from the UK then it is likely you’ll need some form of credit guarantee or insurance to protect you against non-payment or other financial issues.
If you can’t get what you need from the private market, UK Export Finance (UKEF) may be able to help. They provide guarantees, loans, insurance and advice in support of UK exports large and small. Working across a wide range of sectors, UKEF can consider support for exports to over 200 countries.
Here, UKEF share some background information on how export insurance works, what risks it can cover and where you can go for more information.
Export insurance insures an exporter against the risk of not being paid under an export contract or of not being able to recover the costs of performing that contract because of certain events which prevent its performance or lead to its termination.
How does export insurance work?
In carrying out the contract, you may incur costs before delivering goods and providing services to your buyer. For example, you may need to buy raw materials, manufacture parts or hire staff. Export insurance, specifically the policy supplied by UKEF, provides cover against you not being able to recoup those costs because of the occurrence of an insured risk which leads to the contract’s termination or prevents its performance.
As goods are delivered, you may become entitled to payments under the terms of the contract. The policy provides cover against non-payment of those amounts where you have fulfilled your contractual obligations.
How do I ensure I have suitable cover?
You would need to speak to a broker or a UKEF adviser to ensure the policy meets your needs. Some risks to think about covering include:
- insolvency of the buyer
- the buyer’s failure to pay any amount due under an export contract
- political, economic or administrative events outside the UK that prevent payments from the buyer under the export contract being converted into sterling or transferred to the UK
- hostilities or civil disturbances outside the UK that affect performance of the an export contract.
Where can I find out more?
Contact a broker – UKEF has a list of approved brokers on their policy page who can help arrange both private sector cover or UKEF insurance.
Read Open to Export’s overview of trade credit insurance for more information.
For more on UKEF’s insurance read the full guide to the Export Insurance Policy, including how to apply. You can also contact an Export Finance Adviser in your region for free advice on all aspects of export finance and insurance.