Small And Medium Enterprise – (SME)

Policy For SME Sector


ECGC introduced a Policy exclusively for the SME sector units in 4th July, 2008.
The Policy particularly provides the SME Sector easy administrative and operational convenience.
The risks covered under the policy:

a. Commercial Risks


I. Risks covered on the overseas buyers:

  • Insolvency of the buyer.
  • Failure of the buyer to make the payment due within a specified period, normally 2 months from the due date.
  • Buyer’s failure to accept the goods, subject to certain conditions.

II .Risks covered on the L/c opening Bank

  • Insolvency of the L/c Opening bank
  • Failure of the L/C opening bank to make the payment due within a specified period normally 2 months from the due date.


b. Political Risks

  • Protection is available upto the Loss Limit approved on the buyer under the Policy.
  • Premium is payable only on the Loss Limit approved on the buyer, irrespective of the shipments effected to the buyer.
  • Separate Policy per buyer.
  • No Claim Bonus (NCB) of 5% subject to no claim, upto a maximum of 50%.


Highlights:

  • Imposition of restriction by the Government of the buyer’s country or any Government action, which may block or delay the transfer of payment made by the buyer.
  • War, civil war, revolution or civil disturbances in the buyer’s country. New import restrictions or cancellation of a valid import license in buyer’s country.
  • Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which cannot be recovered from the buyer.
  • Any other cause of loss occurring outside India not normally insured by general insurers, and beyond the control of both the exporter and the buyer.


The features of the SME Policy are as und


Features of Small and Medium Exporters Policy at a glance No. Particulars Details

  1. Policy period : 12 months
  2. Processing Fees : Rs.1000
  3. Credit limit fees : No
  4. Declarations : No
  5. Premium : Rs5000
  6. Maximum Loss Limit : Rs.10 lacs
  7. Single Loss Limit : Rs. 3 lacs
  8. Report of overdue : more than 60 days from the due date
  9. Waiting period : 2 months from the due date or extended Due date
  10. Percentage of cover : 90%


This Policy is meant for exporters engaged in manufacturing activities having invested in plant and machinery or engaged in export of services having invested in equipment as per MSMED Act, 2006. This Policy can be issued to an exporter qualifying as per the MSMED Act, 2006.


This Policy can be issued to an exporter qualifying as per the MSMED Act, 2006. The exporter desirous of obtaining the Policy should furnish the certificate issued by the designated authority. (District Industries Centers)


This Policy is not meant for the exporters carrying out trade activities only.


To download the proposal form for a SME Policy,click here.

Click here for Do’s and Don’ts