Capital Goods Insurance

Insurance against the risk that buyers will not reimburse costs incurred if the delivery does not take place and against the risk that you either do not, do not entirely or very late, receive the principal money/payment and interest.

Risks insured

This insurance covers what is referred to as the manufacturing risk and the credit risk. The manufacturing risk is the risk that your buyer does not reimburse the costs incurred if the delivery should not take place. The credit risk is the risk that you either does not do not entirely or with considerable delay receive the agreed price and possible interest in Euros in the Euro Zone.

Atradius does not cover claims resulting from a policyholder’s own negligence or from transportation or war risk during transportation which you can insure with other insurance companies. You may also forfeit the right to cover if the loss is attributable to, for example, errors in the contract or to causes relating to agents. In some cases, it will take some time before the loss is established. Atradius insurance also covers the risk of protracted default. This means that you have the right to claim if an insured receivable has not been settled after the waiting period.

Covered percentage and uninsured portion

With Atradius insurance, you always bear a percentage of the risk yourself. Generally this will be between 2% and 20%. You can also transfer part of your uninsured portion to another party, but only if that party has some involvement in the transaction, such as, for instance, a supplier or a bank. Atradius must approve any transfer of the uninsured portion in advance, for instance when the promise of cover has been issued.

Waiting period

In practice, amounts payable to you are often not paid exactly on the due date. Some delay is even the rule rather than the exception. For this reason, the policy states that a claim can only be paid after a specific period, the so-called waiting period, has been expired. Because of this waiting period, Atradius avoids having to deal continuously with claims, while payment is made only shortly thereafter. In most cases the waiting period is three months, but sometimes this period can be extended to six, nine or twelve months when a country, for example, has a fairly consistent level of payment arrears.

In the case of manufacturing loss, the waiting period will commence on the day on which the contract has been suspended. In the case of a credit loss, the waiting period will commence on the due date of the receivable.

Calculation of the claim

In the case of a manufacturing risk, i.e. if the claim relates to pre-delivery loss, Atradius will base the claim on the costs incurred. In the case of a credit risk, the damage occurs after delivery. In this case Atradius will base the claim on the unpaid part of the agreed price and will then pay the covered percentage of the loss within fourteen days after you have agreed with the claim statement in writing. When compensation is paid, Atradius will take over all rights and securities relating to the transaction.

Following payment of a claim, it is important for you that the transaction should be settled successfully, for if Atradius receives payments with reference to the transaction (proceeds), you will receive a part that equates to your uninsured portion. Atradius will pay claims in Euros. The conversion of amounts in foreign currency will be executed against the exchange rate that is applicable on the due date of the amount payable, but not at a higher exchange rate than the rate that was applicable to the date on which the export contract came into effect.