Page 243 - International Marketing

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BRILLIANT'S Export Management 245

3. Contracts (Comprehensive risks) Policy - It covers both commercial
and political risk from the date of contract.
4. Contracts (Political risks) Policy - It covers only political risks
from the date of contract
Risks Covered Under the Standard Policies
1. Commercial Risks
 Insolvency of the buyer
 Buyers protracted default to pay for goods accepted by him
 Buyer’s failure to accept goods subject to certain conditions
2. Political Risks

 Imposition of restrictions on remittances by the government in
the buyer's country or any government action which may block
or delay payment to exporter.
 War, revolution or civil disturbances in the buyer's country. Can-
cellation of a valid import license or new import licensing restric-
tions in the buyer's country after the date of shipment or con-
tract, as applicable.
 Cancellation of export license or imposition of new export li-
censing restrictions in India after the date of contract (under
contract policy).
 Payment of additional handling, transport or insurance charges
occasioned by interruption or diversion of voyage that cannot be
recovered from the buyer.
 Any other cause of loss occurring outside India, not normally
insured by commercial insurers and beyond the control of the
exporter and / or buyer.
Risks Not Covered Under Standard Policies
The losses due to the following risks are not covered:
1. Commercial disputes including quality disputes raised by the buyer,
unless the exporter obtains a decree from a competent court of
law in the buyer's country in his favour, unless the exporter obtains
a decree from a competent court of law in the buyers' country in
his favour.
2. Causes inherent in the nature of the goods.
3. Buyer's failure to obtain import or exchange authorization from
authorities in his country.
4. Insolvency or default of any agent of the exporter or of the collecting
bank.