Exporting to the United States – A Team Canada Inc Publication

5.8 Reducing financial risk through accounts receivable insurance

After cash in advance, accounts receivable insurance is the best way to avoid the most serious consequences of buyer non-payment. In Canada, these types of insurance are the specialty of Export Development Canada and include:

Accounts Receivable Insurance

EDC will cover up to 90 percent of your losses if your U.S. buyer doesn't pay as the result of a wide variety of commercial and political events, including buyer bankruptcy and default.

Contract Frustration Insurance

EDC protects you against specific political or commercial risks and will cover up to 90 percent of your losses on individual export contracts for services, capital goods or projects.

Wrongful Call Insurance (also called Bid Insurance or Performance Security Insurance)

Useful for exporters who have to post a bond, EDC will cover up to 95 percent of your loss if your buyer, without reason, makes a demand against your standby letter of credit or letter of guarantee (a "wrongful call").