Financing Insurance 

Insurance against the risk that loans, provided by a bank, will not be repaid or repaid in full or that they will be repaid late. This insurance is solely intended for your bank.

While the exporter provides the credit in the case of supplier credits, it is the bank that, in the case of buyer credits, provides a loan directly to your buyer or your buyer’s bank. You will receive a cash payment from the bank and after the delivery of the goods, the only thing remaining will be a debt between your buyer and the bank that provides the loan.

During the loan agreement, the bank is insured through the help of Atradius Financing Insurance for the repayment of the principal sum and the payment of interest. Financing Insurance therefore gives you, the exporter or contractor, greater financial scope.

Risks insured

Financing Insurance covers the risk of the financing bank against the risk that a buyer either does not, or not entirely, or with a considerable delay, repays the principal sum and the interest of the loan. Financing insurance can also cover the risk of protracted defaults, which implies that the bank also has the right to make a claim if, after the expiry of a waiting period, the insured claim has not been paid yet and the cause of loss is yet unclear.

Uninsured portion and covered percentage

Atradius Insurance is always subject to an uninsured portion, which generally lies between 2% and 20%. Atradius therefore covers 98% to 80% of a possible loss. If the bank carries the uninsured portion, it may transfer part of this uninsured portion to another party, provided that this party is involved in the transaction in some way. If this is the case, Atradius must be informed of the transfer in advance and will inform the policyholder in writing whether it agrees to the transfer.

Waiting period

In practice, claims payable to the bank are unfortunately not always settled on or before the due date. Some delay is even more the rule rather than the exception. For this reason, the policy states that a claim may only be made after a specific period, the so-called waiting period, has expired. By laying down this waiting period, Atradius avoids to continuously having to deal with claims, while payment is still made shortly thereafter.

In the case of a credit loss, the waiting period will commence on the due date of the receivable. Usually, the waiting period is three months, but in some cases it can be extended to six, nine or twelve months if a country, for instance, has a fairly constant level of payment arrears.

Calculation of the claim

Atradius will pay the covered percentage of the claim within fourteen days after the insured bank has approved the claim statement in writing. When compensation is paid, Atradius will take over all the rights and security relating to the transaction.

Atradius will pay claims in the currency in which payment instalments are to be made. Compensation is limited to the maximum exchange rate of the currency concerned. The exchange rate of that currency, that is applicable on one working day prior to the expiry date of the waiting period, may fall within the maximum exchange rate. If, however, the rate exceeds this maximum exchange rate, the compensation will be based on the maximum exchange rate.

When the claim has been paid, it is important for the bank that the transaction should be completed successfully. Should Atradius still receive payments on the transaction (so-called proceeds), the bank will receive the part that equates to its uninsured portion.