Trade insurance is insurance for the trade transaction offered by Nippon Export and Investment Insurance (NEXI). Substantially, it is an insurance business conducted by the government to promote the trade of Japanese companies that are trading nations.
▽ Nippon Export and Investment Insurance (NEXI) website
http://nexi.go.jp/
Trade insurance covers not only export but also foreign investment and loans.
Trade insurance compensates for losses arising from the following risks:
●Emergency Risk (Country Risk, Political Risk)
Risk of force majeure that is not the contract party's responsibility, such as war, terrorism, civil unrest, natural disasters, exchange restrictions, etc.
●Credit risk (Commercial Risk, Credit Risk)
Risks to contract counterparts such as bankruptcy of other parties, substantial insolvency, late payment for 3 months or more
Trade insurance compensates for the loss caused by these risks due to the inability to ship cargo, freight and services fee, the inability to recover loans, and the loss of foreign investment due to the inability to continue the joint venture.
Insurance products such as export draft insurance and trade general insurance are diverse. Recently, "SME export insurance" for small and medium-sized enterprises, whose exporters are not obligated to recover, has also appeared. The problem with trade insurance is that the procedure is complicated and it tends to take longer to receive insurance after an accident.
