INSURANCE OF SHORT-TERM EXPORT RECEIVABLES FOR EXPORTERS WITH ANNUAL EXPORT TURNOVER OF UP TO EUR 2 MILLION

If you are a low volume exporter or a start-up exporter, you can easily arrange a simple insurance policy against the risk of non-payment from abroad, with the maximum sum insured of EUR 50,000

 

What can be insured?

 

Cash receivables from the foreign buyer based on performed deliveries during the insurance period

 

Who can be insured?

 

Entrepreneurs with the headquarters in the Republic of Croatia:

  • With annual export turnover of up to € 2 million
  • Who arrange a deferral of payment of up to 180 days with foreign buyers

 

Why insurance?

 

  • You protect your business operations from the risk of non-payment by the foreign buyer
  • You have competitive advantage since you can offer a deferral of payment to the foreign buyer
  • Ensured payment enables you to expand your business operations with new foreign buyers and to new markets
  • Insurance policy replaces other instruments of payment security (such as letter of credit or guarantee)
  • Along with insurance you obtain the information on potential foreign buyers so that you may make the best choice possible

 

Advantages of the Insurance policy

 

  • Easy and fast to arrange
  • HBOR takes up to 95% of risk
  • Fixed insurance price known in advance
  • Minimum administrative obligations for the exporter
  • Payment of indemnity in short time
  • Arrangement of sum insured from € 1,000 to € 50,000 and the insurance duration of 3, 6 or 12 months, depending on the exporter’s needs
  • Insurance of receivables from foreign buyers from around the world

 

What risks are insured?

 

Commercial risks

  • Non-payment by the foreign buyer by expiry of the payment period
  • Non-payment caused by a pre-bankruptcy, bankruptcy or liquidation procedure against the foreign buyer

 

Political risks

  • Non-payment by the foreign buyer due to war and warlike events, rebellion and revolution
  • Non-payment due to the Government’s measures in the foreign buyer’s country limiting or impeding payments owed to the exporter for a period longer than 3 months

 

Costs of the insurance policy

 

  • Insurance premium – payment on one-time basis, on the occasion of concluding the Insurance policy, in accordance with the established premium system
  • Application management fee – payment on one-time basis, HRK 100.00, upon processing of the application for insurance
  • Fee for preparation of creditworthiness report of the foreign buyer – payment on one-time basis, the fee amount depends on the foreign buyer’s country and credit rating agency

 

How much is the insurance premium?

 

The insurance premium depends on the insured sum amount and the insurance period:

 

INSURANCE PERIOD 12 MONTHS 6 MONTHS 3 MONTHS
Sum insured (EUR) Insurance premium (EUR) Insurance premium (EUR)  Insurance premium (EUR)
1,000 – 2,500 43 24 12
2,501 – 5,000 86 47 25
5,001 – 7,500 129 71 37
7,501 – 10,000 172 95 49
10,001 – 12,500 215 118 62
12,501 – 15,000 258 142 74
15,001 – 17,500 301 166 87
17,501 – 20,000 344 189 99
20,001 – 22,500 387 213 111
22,501 – 25,000 430 237 124
25,001 – 27,500 473 260 136
27,501 – 30,000 516 284 148
30,001 – 32,500 559 307 161
32,501 – 35,000 602 331 173
35,001 – 37,500 645 355 185
37,501 – 40,000 688 378 198
40,001 – 42,500 731 402 210
42,501 – 45,000 774 426 233
45,501 – 47,500 817 449 235
47,501 – 50,000 860 473 247

 

*All payments of the insurance premium will be made in HRK equivalent value at the middle exchange rate of the Croatian National Bank on the invoice date delivered by HBOR

 

What is necessary to arrange insurance?

 

To fill in the Application for insurance

 

What are the main obligations of exporter?

 

  • To pay the insurance premium to HBOR before delivery
  • At the time of delivery, the exporter must not have overdue receivables from the foreign buyer
  • To perform and invoice deliveries to the foreign buyer in the insurance period
  • In case of delay in payment by the foreign buyer, immediately upon the maturity date, to suspend further deliveries to the foreign buyer
  • Within 15 days from the expiry of payment due date to inform HBOR on delay in payment by the foreign buyer and the amount of debt

 

What to do in case of non-payment by the foreign buyer?

 

Obligations of the exporter:

 

  • To immediately suspend further deliveries to the foreign buyer
  • Within 15 days from the invoice due date register to inform HBOR on the delay in payment by the foreign buyer
  • Independently or according to HBOR’s instruction, to undertake activities with the goal to collect receivables
  • To submit a claim to HBOR not earlier than 3 months from the payment due date
    Obligations of HBOR:
  • Upon processing of the claim, and not later than within 1 month, to make a decision on indemnity payment
  • To pay indemnity within 15 days from the date of decision on indemnity payment