The sole purpose of being in business is to trade items for a profit and this may not be possible if the trading items are lost or stolen before getting to their destination. Import Export Insurance is a type of insurance cover that relates to goods that are been transported to and from countries. All business transactions come with risks and thus at this time, the value and importance of sound Import- Export Insurance policies becomes ever more apparent. If your company is an exporter or importer – or both – then having the relevant insurance cover in place is essential to ensure the continuing success of your company in the future. The insurance cover you undertake will depend on your personal preference and the line of trade that you are in.
Reasons for Export/Import Goods Insurance –
- Export credit risk insurance –
In case your foreign client fails to make payment for goods due to any reason, then this kind of policy offers you protection. It is a highly popular policy, which ensures that you do not have to hold back from enjoying all those rewards that come from this type of trade by virtue of fear of failure.
This kind of insurance helps to avoid a potentially hazardous situation as it gives details about the buyer’s credit record and general financial history.
This insurance should be bought specially by small- to mid- sized enterprises and newbie exporter as these policies protect you in the event that your foreign buyer decides not to pay you for either commercial or political reasons.
- Cargo/ Marine insurance –
This insurance not only covers consignments that are been transported over Sea. It is a complex package of insurance, which provides a cover for products immediately after they are been dispatched from supplier’s place until they reach the buyer. There are various things, which could go wrong in this process of transfer.
- Currency conversion insurance and Political risk insurance –
Political risk insurance is particularly important type of insurance cover for traders dealing with emerging economies. These types of countries are usually highly prone to interference by that of their governmental authorities that could result in the confiscation of goods or failure to get timely payment. This insurance policy offers highest viable and ripe market for the traders. Political pressure does have a huge impact on any business.
Foreign exchange conversion loss can be considered as the major factor, which can lead to great losses. Currency conversion insurance mitigates against any losses that may arise from the negative effect of currency movements. Taking this kind of insurance is highly recommended, as there is no way to predict future of any currency and any smallest trigger might result in a huge and unexpected change / loss.
Piece of advice – Employees are an essential part of any business and once you appoint them, they are your responsibility while they are on work. Insuring them would be a great help. And If you are a newbie in this business then you can contact a well-known institute which provides export import course to learn the whole process step by step.