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Multi-Buyer Select Risk Policy: Only Pay for What You Cover
June 03, 2020 Office of Communications and Office of Small Business

Are you an existing EXIM customer looking to reduce your premium payments? Are you thinking about export credit insurance for some of your international buyers, but don’t want or need to cover all of them? Consider EXIM’s Multi-Buyer Select Risk Insurance Policy, aka, Only Pay for What You Cover.

Exporters of U.S. goods and services can reduce the risk of selling on open account credit terms by insuring their foreign receivables with an EXIM short-term, multi-buyer export credit insurance policy. The Multi-Buyer Select Risk (MBSR) policy option offers three additional benefits for U.S. companies with international sales:

Flexibility: Businesses have the freedom to choose which export credit sales to insure by excluding select lower-risk transactions or customers
Savings: Insurance premiums are only paid on specific higher risk buyers or on sales in high risk markets
Efficiency: Built-in discretionary authority allows exporters to extend open account credit terms without prior EXIM approval

Exclusions from Coverage
EXIM multi-buyer insurance policy types empower U.S. companies to exclude certain transactions. These are known as “standard” exclusions and include:
• Letters of credit transactions
• Transactions payable at sight
• Sales to Canada
• Sales of samples
• Invoices under $10,000

The MBSR policy option also empowers exporters to exclude three types of transaction categories referred to as “non-standard” exclusions:
• Sales to large multinational buyers
• Customers that have paid promptly over the last three years (prime customers)
• Sales to buyers in lower-risk countries

An EXIM small business customer sells industrial equipment to customers in over 80 countries. About half of these buyers are either:
• Large, publicly traded multi-national corporations
• Long-term trusted trading partners
• Located in low risk markets

Applying the MBSR policy option for exclusions on these buyers reduced the exporter’s premium payments by over 40 percent.

Next Steps
Prospective EXIM customers may include the MBSR policy option in their application for insurance. Current short-term multi-buyer policy holders may request conversion to an MBSR policy on their policy renewal date.

Reach out to an EXIM Registered Broker for more information or contact your local EXIM trade finance specialist for details on covered losses, transaction coverage percentage, premium rates and more!

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EXIM’s Blog postings are intended to highlight various facets of exporting, but the postings are not legal advice, and are not intended to summarize all legal requirements associated with exporting.