UKEF Export Insurance: protect export receivables when private cover is unavailable

Export insurance transfers part of the risk that an overseas buyer does not pay. UK Export Finance can provide government-backed cover where private-market insurance is unavailable or unsuitable, including certain emerging-market and higher-risk transactions. The policy protects defined losses under the export contract, not the physical goods in transit.

UKEF can insure up to 95 percent of eligible potential loss

Current UKEF guidance says its Export Insurance Policy can cover up to 95 percent of potential losses under an eligible export contract. Covered events can include buyer insolvency or failure to pay, certain pre-credit losses before shipment and political events that prevent the export from being completed.

The remaining exposure stays with the exporter, and the policy contains conditions and exclusions. Do not treat 95 percent as an automatic cash guarantee for every unpaid invoice. The company must comply with the policy and show that the loss falls within the insured risk.

UKEF is intended to complement, not displace, private credit insurance

GOV.UK says UKEF can help where an exporter has been unable to obtain suitable insurance from the private market. Certain countries and short-term risks are considered marketable under international obligations and are therefore restricted for standard UKEF short-term export insurance.

Check the buyer's country and risk horizon before assuming the policy is available. A sale to a high-risk emerging market can fit UKEF's role much more naturally than a routine short-term sale to a market where private insurers are expected to provide cover.

The insurer underwrites the overseas buyer and the export contract

The application asks for the exporter's financial information, buyer details, trading history and information about the contract. UKEF evaluates both the commercial buyer risk and the nature of the export. A weak buyer or disputed contract can change pricing, conditions or eligibility.

Prepare recent buyer accounts where available, credit history, contract terms, payment milestones and the expected maximum exposure. If the exporter has already shipped large amounts without insurance, do not assume those historic receivables automatically become covered when the policy is issued.

Premium needs to be paid according to the policy structure

UKEF says a single-contract policy premium is paid when the policy is accepted. Under a multiple-contract policy, the exporter declares each new export sale and normally pays the calculated premium within 14 days of the declaration and before goods are dispatched or services are carried out.

Build premium administration into the export-order workflow. Insurance that exists in principle can fail operationally if sales staff ship before the required declaration or finance forgets the premium. The policy record should sit beside the export contract and receivable ledger.

Non-payment claims require evidence and can involve a waiting period

UKEF's current policy-management guidance says a non-payment claim can generally be submitted after the insured amount has remained unpaid for six months, although exporters should notify UKEF as soon as possible rather than waiting until the claim date. Disputes with the buyer can require arbitration or a court judgment.

Keep invoices, shipping evidence, buyer correspondence and collection activity. If the customer alleges defective goods, the problem is no longer a simple unpaid invoice. The exporter may need to resolve the contractual dispute before insurance pays.

Material contract and payment-term changes need to be reported

UKEF says policyholders must report changes to the export contract and should notify it when they become aware the buyer is unlikely to pay or when payment is overdue beyond specified periods. Some changes need written consent to preserve cover.

Do not renegotiate a 30-day payment term into 180 days informally after the buyer gets into trouble and assume the policy remains unchanged. Credit insurance works only when commercial and insurance teams communicate. The receivables process should flag insured buyers and the notification duties attached to them.

Run a worked exposure schedule by buyer. If an insured customer has a £500,000 approved limit and the exporter has £350,000 invoiced plus £120,000 of work completed but not yet billed, the remaining capacity may be much smaller than sales staff assume. Check how the policy defines insured exposure and pre-credit cover before accepting another order.

Credit insurance should also change collection behaviour. An overdue insured invoice still needs active chasing, documentary evidence and timely notification to the insurer. A finance team that becomes less disciplined because "UKEF will pay" can jeopardise the claim. Insurance is strongest when it sits on top of good credit control rather than replacing it.