Financial and Legal Costs/Export Credit Insurance
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Unit 4.8-Financial and Legal Costs |
Introduction | Bank Charges | Insurance Premiums | Export Credit Insurance | Legal Fees | Summary | Resources | Activities | Assessment |
Export Credit Insurance
[edit | edit source]Export credit insurance is a specialized line of insurance. These policies cover sales from the United States to countries world-wide. Like domestic policies, they cover against the financial inability to repay for goods sold or services rendered. Premiums for export coverage generally run higher and could range from 2.5/10% to 1% of covered sales. Many companies are finding that requiring letters of credit and other cash documents places an artificial obstacle between a buyer and seller, restricting growth. These companies often use credit insurance to offer open terms and be more competitive in the global market place.