Export insurance is usually recommended to cover two broad categories:
Coverage should protect exporters from loss or damage to goods during transit. Responsibility for effecting insurance will be determined by the terms of the contract between seller and buyer and Incoterms are quite specific in this regard. The extent of cover will vary from contract to contract but CIF (cost+insurance+freight) value plus 10% is often used as a guide to recover all costs in the event of complete loss.
This will depend on the payment terms negotiated between buyer and sellerbut insurance against the risk of non-payment can be obtained through the Australian Government’s Export Finance & Insurance Corporation (EFIC) or private insurers. The following risks will usually be covered:
Default by buyers
Buyers refusal to accept delivery
Buyer insolvency
Delivery affected by unforeseen events
War, hostilities or civil disturbances
Government intervention
Exporters also need to be aware of the requirement to take out product liability insurance if their product may be deemed to cause damage or personal injury
Further information from Export Finance and Insurance Corporation (efic) or through insurance agents