Export Credit Guarantee Corporation is a central government undertaking body to provide credit guarantee on the default of payments by the buyer. It works as an insurance firm who guarantees export payment, if the buyer defaults in making payment.
Procedures with ECGC to cover insurance:
Once after finalising the order, the buyer execute a purchase order to the seller with the terms and conditions as agreed by both. The purchase order should contain full details of buyer and buyer’s bank account details. The exporter approaches Export Guarantee Corporation to get approval on the buyer with amount of limit. Here, the ECGC with their available contact with overseas network finds out the credit worthiness of the said buyer and arrives a figure of creditworthiness and inform the maximum limit of amount can be shipped at any point of time. Export Credit Guarantee Corporation collects premium on the amount of approval and issue insurance policy accordingly.
The exporter can apply with ECGC for insurance on shipment wise order as specific insurance policy, or at lump sum as comprehensive policy. If an exporter obtain a specific policy, the contract of insurance is only for that particular shipment. You as an exporter has to pay premium only against the said shipment. If you prefer to obtain a comprehensive policy against any buyer, you can get approval from ECGC, the amount of credit worthiness of the said buyer.
Find more information at ECGC website