Specialty Covers: Contracts
Product offerings :
Comprehensive Commercial & Political Risks Coverage
90% Indemnity Cover
Non-Cancellable Credit Limits
Flexible tenors upto 7 years
Contract Frustration Policies provide coverage for losses on contracts with foreign entities, either government or privately owned. E.g. breach of power purchase agreements, payment default by a government buyer etc.
Government Obligor / Public Buyer :
The policy insures pre-shipment and/or post-shipment risks on contracts with a Government-Owned Entity (Public Buyer Default Cover). Pre-shipment risks include import or export embargo; buyer's country frustration of the contract; war and political violence; contract repudiation and failure to honor an arbitration award. Post-shipment risks include nonpayment or failure to honor a letter of credit. Policies can be structured to provide cover against non-delivery of contracted goods by government-owned suppliers, followed by a failure to return/repay the insured’s advance payment.
The insurance covers contracts with a private obligor against pre-shipment political risks and insolvency, and/or post-shipment nonpayment. Pre-shipment risks include import or export embargo; buyer's country frustration of the contract; war and political violence; and insolvency of the buyer. Post-shipment risks can include insolvency or nonpayment by the buyer or nonpayment of a letter of credit.
As a part of Contract Frustration Insurance, this policy insures fair and unfair calling of bid, advance payment or performance bonds related to trade transactions. Coverage is structured on both government-owned (fair/unfair calling) and private obligors (fair calling for specified political risks only).
The policy insures against risk of non-delivery of contracted goods by government-owned or private suppliers followed by a failure to return/repay the insured's advance payment.