Business

Question No.3

An alternative to using a letter of credit is export credit insurance. What are the advantages and disadvantages of using export credit insurance rather than a letter of credit for exporting?

A luxury yacht from California to Canada

Machine tools from New York to Ukraine

When an international customer defaults or cannot pay in any case, the exporter covers the damages through the Export credit insurance covers. In a situation when there is bankruptcy or inflation affecting the payment power of the customer, export insurance will compensate the major portion of what is due on the customer. Hence, the export credit ...