UK exporters can insure themselves against the risk of non-payment thanks to a new initiative from UK Export Finance (UKEF).
Responding to the impact of the coronavirus (COVID-19) pandemic, UKEF has extended its export insurance scheme to major markets, including the European Union, with immediate effect.
The move means that the Export Insurance Policy (EXIP) will now cover transactions with EU Member States, as well as Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States.
Its announcement that cover now extends to countries that were previously excluded from the scheme followed a decision by the European Commission to loosen rules on the provision of short-term export credit insurance.
UKEF says that making EXIP more widely available will allow companies concerned about the impact of coronavirus to export with confidence, knowing that the insurance will cover up to 95% of the value of an export contract.
The insurance protects against the risk of non-payment in cases where customers become insolvent or official actions make it impossible for contracts to be fulfilled. It will also, UKEF notes, help UK exporters offer more flexible payment terms to overseas buyers.
In 2019, exports from the UK to the markets now added to the Export Insurance Policy scheme were worth £499 billion — equivalent to 74% of all international sales from the UK.
Commenting on the news, Exports Minister Graham Stuart said that, with exports playing a crucial role in the economy, “it’s right that UK businesses trading internationally are protected during this challenging time”.
Information about UKEF’s Export Insurance Policy can be found at https://www.gov.uk/guidance/export-insurance-policy.
Last reviewed 6 April 2020