ECGC credit insurance: which policy suits your business

This guide is for exporters who sell on credit (DP, DA or open account) or under letters of credit and want to protect those receivables. It explains what ECGC's short-term export credit insurance covers, how the main policies differ and how to match one to your business.

What ECGC short-term cover protects

ECGC Limited is the Government of India's export credit insurer, regulated by IRDAI. Its short-term policies pay you a fixed share of your loss when an overseas buyer, the buyer's bank or the buyer's country stops you from being paid. The risks named in ECGC's policy wordings fall into three groups.

• Commercial (buyer) risks: the buyer becomes insolvent; the buyer fails to pay within a set period after the due date (four months under the Shipments Comprehensive Risks policy, two months under the Small Exporters and Micro Exporters policies); or the buyer fails or refuses to accept goods already exported, where you are not at fault.
• Political risks: laws or orders in the buyer's country that block or delay transfer of payment to India; war, civil war, revolution or civil disturbance there; new import restrictions or cancellation of an import licence already issued; and extra freight or handling costs from a diverted or interrupted voyage that cannot be recovered from the buyer.
• LC opening bank risk: insolvency or payment default of the bank that opened the letter of credit.

The cover is not a guarantee of payment. ECGC excludes, among other things, disputes about quality, quantity or specification (unless you obtain a final court judgment against the buyer, which ECGC may waive), exchange rate losses, defaults by banks, carriers or insurers acting for you, and a buyer's failure to obtain an import licence in the first place. Physical loss or damage to the goods is a matter for marine cargo insurance, not ECGC.

The main policies compared

ECGC also has separate policies for services exports, IT-enabled services, software projects and consignment exports, and foreign currency versions of the buyer exposure policies. The figures above are from ECGC's product pages and leaflets; your own policy schedule is what binds you.

How to choose

1. Start with turnover. Up to ₹1 crore of exports, compare MEP with SEP. Up to ₹5 crore, SEP is the usual fit. Above that, SCR, moving to ETP once your premium reaches ₹20 lakh a year. MBEP is designed for exporters above ₹20 crore with many buyers.
2. Decide whether you want everything covered. Whole-turnover policies (SCR, SEP, ETP) require you to declare every eligible shipment, good buyers included. Selective policies (SSP, BWP) let you pick, but pay 80% rather than 90%.
3. Count your buyers. Regular shipments to one or two large buyers point to SBEP. A wide spread of buyers with frequent shipments points to MBEP or a whole-turnover policy.
4. Check the buyer's country. Look up its ECGC risk category on the country rating tool. Shipments to countries in ECGC's restricted cover list need specific prior approval.
5. Estimate the premium. It depends mainly on the buyer's country, the payment terms and the credit period. Use the premium calculator for a rough figure, then get a quote from ECGC.
6. Apply and set up credit limits. Proposal forms are on ECGC's website and applications can be made on its online portal. Before you ship on credit, get a credit limit on each buyer; see ECGC buyer credit limits.

If your bank finances your exports

ECGC also insures banks, under its Export Credit Insurance for Banks (ECIB) covers. Here the bank, not you, is the insured: whole-turnover packing credit (ECIB-WTPC) protects the bank's pre-shipment advances, and whole-turnover post-shipment (ECIB-WTPS) its post-shipment advances, against your own insolvency or protracted default. This makes lending to you easier for the bank, but it does nothing for you if your buyer does not pay. The bank's cover and an exporter's policy are separate, and you may need both. Ask your bank whether your account is covered and whether any cost is passed on to you.

Watch out for

• Premium not in place. Under SCR, premium falls due when you ship and must be available in your deposit premium account; if the balance is short on the shipment date, those shipments are not covered.
• Missed declarations. Whole-turnover policies need monthly shipment declarations by the 15th, including a nil declaration in a month with no shipments.
• Shipping beyond the credit limit. ECGC's liability for commercial risks on a buyer stops at the approved limit, whatever premium you paid.
• Changing terms quietly. Extending a due date or switching DP to DA without ECGC's written consent can cost you the claim.
• Treating cover as a substitute for checks. You carry at least 10% of every loss yourself. Verify buyers before you trade.

Related on Exportsmitra

• ECGC premium calculator
• ECGC country risk ratings
• ECGC buyer credit limits: applying, using and renewing them
• When a buyer does not pay: ECGC declarations and claims step by step
• Choosing payment terms: advance, LC, DP, DA and open account

Sources

• ECGC: Shipments Comprehensive Risks Policy (SCR)
• ECGC: Shipments Comprehensive Risks Policy wording (PDF)
• ECGC: SCR policy leaflet (PDF)
• ECGC: Small Exporters Policy leaflet (PDF)
• ECGC: Micro Exporters Policy leaflet (PDF)
• ECGC: Export Turnover Policy (ETP)
• ECGC: Specific Shipment Policy (SSP)
• ECGC: Exports (Specific Buyers) Policy (BWP)
• ECGC: Buyer Exposure Policy (SBEP)
• ECGC: Multi-Buyer Exposure Policy leaflet (PDF)
• ECGC: Whole Turnover Packing Credit (ECIB-WTPC)

Last checked 1 October 2026. Rules change: confirm with ECGC before you act.