Finance and Insurance
Insuring Your Cargo
When exporting, there are two key areas of insurance to consider:
- Cover against damage done to goods during transit.
- Protection against non-payment by the buyer.
The first area is often referred to as Marine Insurance and can be obtained from a number of entities including:
- insurance agents;
- customs agents;
- insurance brokers;
- foreign insurance companies; and
- Australian registered insurance companies.
Information on Western Australian brokers that can assist you can be obtained from the Customs Broker and Forwarders Association of Australia.
Protection against non-payment by the buyer is normally recommended when dealing with buyers in countries where there is a high incidence of non-payment. It is also wise to insure large orders, especially if you are a small business and your contract does not require the buyer to pre-pay. Commercial insurance agencies are able to assist exporters in this regard. Your insurance broker will be able to provide you with a quote for this service.
The Federal Government’s Export Finance and Insurance Corporation
(EFIC) offers a medium-term payments insurance providing cover against non-payment
arising from defined political and commercial risks. You may be eligible
if you require insurance cover greater than $500,000 and the contract involves
payments extending to two years and beyond. Contact EFIC
for further information.
