Guarantee for loss on production and loss on claim
There are two versions of this guarantee: either with the exporter as guarantee holder or with the exporter and a bank as guarantee holders in combination. The guarantee with the exporter as guarantee holder is described here.
With exporter as guarantee holder
The guarantee for loss on production and loss on claim covers the risk that your foreign buyer does not pay according to agreement. It also covers your accumulated costs that you cannot invoice, because the buyer has cancelled the agreement. The amount that you can insure with the loss on production and loss on claim guarantee is based on your accumulated costs (invoice amounts minus profit margin). This guarantee protects against events that occur with effect from the date on which you have a binding agreement. EKN can cover both small and large scale transactions with this guarantee.
With an EKN guarantee you know that you will receive compensation if your customer does not pay or breaks off the agreement, which makes it easier for you to offer the customer credit.
You can also use the guarantee as security if you choose to have a bank or other credit institution finance the transaction. In this case, you assign the claim and the rights under guarantee to the financier.
When transferring the rights, EKN offers the bank more favourable terms, if the buyer accepts that the payment obligation is independent from the export contract. It can be documented directly in the export contract or in, for example, a bill of exchange, promissory note or letter of credit.
For the supplementary conditions, you and the bank fill in the form Notice of transfer/pledge of rights and send to EKN.
Latest updated 21 Sep 2020