Trade credit insurance protects exporters and sellers against customers failing to pay, and political risk cover protects against government action, war and currency transfer problems. Private insurers provide most cover, while government export credit agencies such as UK Export Finance and the US Export-Import Bank fill gaps, within international disciplines negotiated at the OECD.
What credit and political risk cover does
Export credit insurance typically covers buyer insolvency and protracted default, plus political risks such as war, riots, currency inconvertibility and expropriation. US guidance states that short-term cover pays 90 to 95% of losses and medium-term cover 100% after a 15% down payment, and that it does not cover physical damage to goods or FX losses.
UK Export Finance insures up to 95% of potential losses for UK exporters that cannot get cover privately, provided at least 20% of the export value is UK content. Its policy also covers political events that prevent completion and early termination before shipment.123456
Government agencies and international rules
The US Export-Import Bank supports US exports with single-buyer and multi-buyer policies for terms up to five years. Officially supported export credits are governed by disciplines negotiated at the OECD to keep a level playing field. US government political risk insurance through the Development Finance Corporation prioritises middle- and low-income countries, so it is generally not a route for investments in very high-income markets such as the UAE.789
| Agency | Cover | Key condition | Source |
|---|---|---|---|
| UK Export Finance | Up to 95% of losses; buyer default, political events, termination | UK business base; 20% UK content; private cover unavailable | GOV.UK |
| US Export-Import Bank (with private carriers) | 90 to 95% short-term; 100% medium-term after 15% down payment | Single-buyer or multi-buyer; terms up to five years | trade.gov |
Decisions to make
- Is private credit insurance available for the buyer and country?6UK Export Finance cover is available only where private cover cannot be obtained.
- What share of loss will the business retain?23Cover is usually below 100% because of deductibles and co-insurance.
- Is the main concern non-payment or government action against an investment?19Credit insurance protects receivables; investment political risk cover is a separate product with its own eligibility.
Documents usually needed
- Credit insurance policy with buyer limits and country schedule
- Sales contracts and payment terms matching the policy
- Buyer credit information and limit approvals
- Claims notifications and overdue reporting
- For agency cover: eligibility evidence such as UK content calculations
Common mistakes
- Trading above the insurer's approved buyer limit
- Missing overdue reporting deadlines in the policy
- Assuming credit insurance covers damaged goods or FX losses
- Applying to a government agency before testing the private market where that is a condition
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- MIGA's official pages could not yet be checked, so its political risk guarantees are not described here.
- Germany's federal export credit guarantees (Hermes cover), India's ECGC, the UAE's Etihad Credit Insurance, the Saudi EXIM Bank and Bpifrance export insurance were not confirmed.
- The OECD Arrangement text and the EU communication limiting public short-term credit insurance for marketable risks could not yet be checked.
- Berne Union and private market practice were not researched.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Export credit insurance typically covers commercial risks such as buyer insolvency, bankruptcy and protracted default, and political risks such as war, terrorism, riots, revolution, currency inconvertibility, expropriation and changes in import or export regulations. International Trade Administration description of standard cover.
US trade finance guidance states that short-term export credit insurance provides 90 to 95 percent cover against commercial and political risks that result in buyer payment defaults, and medium-term cover provides 100 percent after a required minimum 15 percent down payment. Describes US export credit insurance from EXIM and private carriers; terms vary by policy.
Export credit insurance does not cover physical loss of or damage to the goods shipped, or foreign exchange loss, and exporters usually bear part of any loss through a deductible and co-insurance. International Trade Administration description; cargo insurance and FX hedging are separate.
UK Export Finance's export insurance policy covers a UK exporter if the buyer fails to pay, for example because of insolvency, if the export cannot be completed because of political events such as new import restrictions or war, or if the contract is ended early before shipment. UK government export credit agency product.
UK Export Finance can insure up to 95% of potential losses under an export contract. Export insurance policy.
To use UK Export Finance's export insurance policy, the exporter must be exporting from the UK with an established UK business base, at least 20% of the export value must come from UK goods or services, and it must be unable to obtain export insurance from the private sector. UK content may include the exporter's profit margin.
The Export-Import Bank of the United States is the government agency that assists in financing US exports, and US export credit insurance is offered on a single-buyer or multi-buyer basis for short terms of up to one year and medium terms of one to five years. Federal agency.
The OECD describes itself as the key multilateral negotiating forum for export credit disciplines, which set financial and good governance rules to give exporters a level playing field. Covers officially supported export credits from participating governments' export credit agencies; the Arrangement text could not yet be checked.
The US State Department reports that the UAE is a very high-income country under the statutes of the US International Development Finance Corporation, which gives priority to projects in middle- and low-income countries. Relevant to the availability of US government political risk insurance for UAE investments.
Questions on this topic
9 statements on trade credit and political risk
