Small Exporters Policy – (SEP)

Credit Insurance Policies

Small Exporters Policy

The Small Exporter’s Policy is basically the Standard Policy, incorporating certain improvements in terms of cover, in order to encourage small exporters to obtain and operate the policy. It is issued to exporters whose anticipated export turnover for the period of one year does not exceed Rs. 5 crores . The Maximum Liability under the SEP shall be fixed as per laid down guidelines, but shall not exceed Rs. 2 crores. The nature of commercial risks and political risks cover is similar to that of the Shipment Comprehensive Risk (SCR) or Standard policy.

The salient features of Small Exporters Policy:

Period of Policy:

Small Exporter’s Policy is issued for a period of 12 months.

Minimum premium:

Premium payable will be determined on the basis of projected exports on an annual basis subject to a minimum premium of Rs. 5000/- for the policy period. No claim bonus in the premium rate is granted every year at the rate of 5% .

Declaration of shipments:

Shipments need to be declared monthly.

Declaration of overdue payments:

Small exporters are required to submit monthly declarations of all payments remaining overdue by more than 60 days from the due date, as against 30 days in the case of exporters holding the Standard Policy.

Waiting period for claims:

The normal waiting period of 4 months under the Standard Policy has been halved in the case of claims arising under the Small Exporter’s Policy.

Change in terms of payment of extension in credit period:

In order to enable small exporters to deal with their buyers in a flexible manner, the following facilities are allowed:

  • A small exporter may, without prior approval of ECGC convert a D/P bill into DA bill, provided that he has already obtained suitable credit limit on the buyer on D/A terms.
  • Where the value of this bill is not more than Rs.3 lacs, conversion of D/P bill into D/A bill is permitted even if credit limit on the buyer has been obtained on D/P terms only, but only one claim can be considered during the policy period on account of losses arising from such conversions.
  • A small exporter may, without the prior approval of ECGC extend the due date of payment of a D/A bill provided that a credit limit on the buyer on D/A terms is in force at the time of such extension.

Resale of unaccepted goods:

If, upon non-acceptance of goods by a buyer, the exporter sells the goods to an alternate buyer without obtaining prior approval of ECGC even when the loss exceeds 25% of the gross invoice value, ECGC may consider payment of claims up to an amount considered reasonable, provided that ECGC is satisfied that the exporter did his best under the circumstances to minimize the loss. In all other respects, the Small Exporter’s Policy has the same features as the Standard Policy.

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

For any further clarification on the scheme, click here.

Click here for Do’s and Don’ts