This insurance policy covers the risk of the breach of sales contract by the buyer during the production phase when the exporter is busy with manufacturing the ordered goods. In other words, as a result of the political and commercial risks happening during the manufacturing or production period, the buyer may cancel its shipping order or violate the contract before the goods are exported or shipped. Although, the Iranian exporter still has the goods at hand, there is always a bad chance of not being able to sell the manufactured but refused goods in a second market as they are customized goods specifically produced for that foreign buyer and may not find demand elsewhere or might be sold at a very discounted cheaper price where the exporter loses its profit margin altogether. Therefore, the Fund compensates the exporter for the lost profit or loss of the whole sales contract value.
Who might apply?
Such an insurance policy and cover is available for all Iranian exporters of goods and services who enjoy a commercial Card from Iran’s chamber of commerce or other related chambers of commerce all over the country as a real or legal person.
What political and commercial risks are covered?
- Sanctions imposed on the buyer's country and cancellation of the relevant licenses in the target country.
- Sanctions imposed on the exporter’s country and cancellation of the relevant licenses in the country of origin.
- Third country embargo which leads to the contract frustration
- War and other forms of political unrest or terrorism attacks leading to the breach of sales contract
- Termination or breach of contract by the buyer
- Non-fulfillment of buyer's obligations due to the cancellation od the purchase order.
Premium calculation:
The premium for this insurance policy is calculated based on the risk group of the buyers’ country and the tenor or the period between the shipping order and the virtual shipment of the goods which is subdivided into two general groups shorter than one year and longer than one year.