Credit Insurance Policies
Where Indian companies conclude contracts with foreign principals for providing them with technical or professional services, payments due under the contracts are open to risks similar to those under supply contracts. In order to give a measure of protection to such exporters of services, ECGC has introduced the Services Policy.
What are the different types of Services Policy and what protection do they offer?
- Specific Services Contract (Comprehensive Risks) Policy;
- Specific Services Contract (Political Risks) Policy;
- Whole-turnover Services (Comprehensive Risks) Policy; and
- Whole-turnover Services (Political Risks) Policy
Specific Services Policy, as its name indicates, is issued to cover a single specified contract. It is issued to provide cover for contracts, which are large in value and extend over a relatively long period. Whole-turnover services policies are appropriate for exporters who provide services to a set of principles on a repetitive basis and where the period of each contract is relatively short. Such policies are issued to cover all services contracts that may be concluded by the exporter over a period of 24 months ahead.
The Corporation would expect that the terms of payment for the services are in line with customary practices in international trade in these lines. Contracts should normally provide for an adequate advance payment and the balance should be payable periodically based on the progress of work. The payments should be backed by satisfactory security in the form of Letters of Credit or bank guarantees.
Services policies are designed to cover contracts under which only services are to be rendered. Contracts under which the value of services to be rendered forms only a small part of a contract involving supply of machinery or equipment will be covered under an appropriate specific policy for supply contracts.
To get further details please contact the nearest Branch office of the Corporation.