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What are Policy Endorsements and How Do They Work?
April 06, 2021 Ken Click, Business Development Specialist & Jennifer Krause, Broker Account Manager, Office of Small Business

U.S. companies can face unique circumstances when selling to foreign buyers and sometimes more than a standard EXIM Export Credit Insurance policy is needed to fulfill the need for risk protection. Because of this, EXIM offers policy endorsements which can expand or change policy coverage, and there are dozens of endorsements available for Single-Buyer and Multi-Buyer policies. To help credit insurance applicants decide which endorsements, if any, should be added to a policy, the agency’s staff strongly encourages the use of an EXIM-registered insurance broker who can advise on selecting appropriate coverage. To request a policy endorsement after consulting with a broker, visit EXIM Online, an application and reporting system, select the appropriate endorsement and submit. EXIM’s underwriting department will be automatically notified.

In no particular order, some endorsement examples include:

  • Bulk Agricultural Commodities: This endorsement increases coverage percentage for buyer nonpayment to 98 percent for bulk agricultural commodities. Typically, bulk agricultural commodities such as wheat, soybeans, and rice are covered by EXIM at 90 percent for Single-Buyer policies and 95 percent for Multi-Buyer ones. These types of commodities are sold on thin margins so the endorsement allows for greater coverage in the event of buyer nonpayment.
  • Additional Named Insured: Another company other than the first named insured in the policy documents could have the same rights to coverage as the first named insured. For example, a U.S.-headquartered company might have a related foreign entity that invoices international customers it sells U.S. products to. The related foreign entity could be listed as the additional named insured under this endorsement.
  • Warehouse: Some U.S. exporters utilize foreign warehouses to expedite shipments of their products to international customers. This endorsement provides coverage for products sold out of a foreign warehouse.
  • Lender Assignee: In the event of a claim payment under an exporter’s EXIM policy, the approved lender loss payee (also known as the assignee) would be the recipient of the loss payment from EXIM.

If you would more information about policy endorsements or to be connected with an EXIM-registered broker in your area, please click here to schedule a free consultation with an EXIM trade finance specialist.

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