Question 1

When and how should I inform HKECIC when the buyer delays payment after he accepted the goods?

Accepted Answer

Small Business Policy (SBP) / Self-Underwritten Policy (SUP): You must submit a case to HKECIC via "Risk Management" of EC-Reach within 5 business days when any shipment remains unpaid for more than 60 days (30 days for HKG buyer) or the buyer is or appears to be unable to pay.
Online Micro-Business Policy (OMBP): You must submit a case to HKECIC via "Risk Management" of EC-Reach within 5 business days when any shipment remains unpaid for more than 30 days or the buyer is or appears to be unable to pay.

Question 2

What should I do after reporting the buyer's/client's non-payment to HKECIC? When and how should I lodge claims with HKECIC?

Accepted Answer

Upon receipt of the notification of the buyer's/client's non-payment, HKECIC would follow up on the case development with you closely and render advice as necessary.  You should keep pushing the buyer/client for payment and informing HKECIC of the case development.  
If no amicable settlement can be reached, you may lodge claim by supporting the claim application form and the supporting documents.  You would need to take the loss minimisation actions as required by HKECIC.

Question 3

What actions for minimising losses would HKECIC suggest us to take?

Accepted Answer

It depends on the circumstances of the case. Generally speaking, in the case of insolvency, you should immediately register the debt against the buyer with his liquidator/administrator/trustee, as applicable.

In the case of a protracted default, you should send a strongly worded letter to the buyer demanding for immediate payment. You may also arrange, through your bank, to have the bills protested against the buyer if you considered that this action is effective.  If no amicable settlement can be reached, you need to take loss minimisation actions including but not limited to the appointment of debt collectors and/or the institution of legal proceedings against the buyer.

In the case of repudiation, you should first arrange proper storage of and insurance for the goods involved. Then you should send a written demand to the buyer to take delivery of and pay for the goods within a certain time limit. If such action fails, you should look for alternative buyer(s) for reselling the goods in order to minimise losses if, in your commercial judgement, this is the best course of action and hold the original buyer responsible for any losses incurred. You should obtain HKECIC's prior approval before resale/disposal of the goods.

Question 4

The buyer's credit limit has been cancelled and it requests me to supply goods by advance payment. Will my claim application be affected if I decides to trade with him again?

Accepted Answer

Small Business Policy (SBP) / Self-Underwritten Policy (SUP):

According to the Policy, unless otherwise agreed by HKECIC, any payment, whether or not relating to the insurable contracts, received during the period when the cover is suspended and/or after the credit limit is cancelled either automatically or by HKECIC on any buyer shall be deemed to reduce the outstanding amount which has fallen due first even though the buyer may have indicated that the payment was in settlement of an outstanding amount falling due at some later date or even such payment was not in respect of the insurable contracts. As such, the payment received for the new shipments would be allocated to settle the shipment which has fallen due first which may affect the amount of claims payment.

Online Micro-Business Policy (OMBP):

According to the Policy, unless otherwise agreed by HKECIC, any payment, whether or not relating to the insurable contracts, received after cancellation of the credit limit by HKECIC on any buyer shall be deemed to reduce the outstanding amount which has fallen due first even though the buyer may have indicated that the payment was in settlement of an outstanding amount falling due at some later date or even such payment was not in respect of the insurable contracts. As such, the payment received for the new shipments would be allocated to settle the shipment which has fallen due first which may affect the amount of claims payment.

Question 5

What factors will HKECIC take into account when processing my claims application?

Accepted Answer

- your claim is in relation to an event of loss covered under your Policy;- you have a valid credit limit on the buyer and have declared the shipment(s) concerned;- the contracts of sales between the buyer and yourself have been properly executed by you;- you have taken all reasonable actions to prevent or minimize losses as required by HKECIC; and- you have complied with all the terms and conditions of your Policy.

Question 6

If the buyer/client request for a price cut say 50% of the outstanding debt, what will happen if I accept the offer?

Accepted Answer

If the price cut is mutually agreed by you and the buyer/client after shipment, the amount of loss liable by the HKECIC will be based on the newly agreed price.

If the price cut is not agreed by you, and the buyer still admits its payment obligation but is unable to pay, you can lodge claim with the HKECIC. Any claim made will be subject to the fulfillment of the policy terms and conditions.

Yet, in the scenario that the buyer disputes its payment obligation and refuses to pay, the policyholder would need to take action, including but not limited to institution of legal proceeding, to resolve the disputes raised by the buyer over its payment obligation according to the terms and conditions under the Policy before the HKECIC can proceed to process the claim application.

Question 7

When can I receive the claim payment?

Accepted Answer

Any claim will be made, subject to your fulfilment of with the policy terms and conditions. The earliest date of claim payment shall be the date of loss which is defined in the policy and quoted as follows

• in case of insolvency or bankruptcy of the buyer - the date on which the first event of insolvency occurs ;• in case of default in payment - 4 months after the due date for payment;• in case of repudiation - the date on which the goods have been resold or disposed of;• in case of any other events - 4 months after the event which causes the loss.

Question 8

How much will I get for the claim payment?

Accepted Answer

We will compensate you the amount of loss or credit limit, whichever is lower, multiplied by the percentage of indemnity applicable to your policy.

Question 9

Will HKECIC take over the recovery action once my claim has been paid?

Accepted Answer

HKECIC would still needs your assistance to continue the pursuit action. We would work closely with you and share any approved expenses incurred.

Question 10

How will be recoveries shared and when should I pay HKECIC the recoveries received?

Accepted Answer

All sums recovered are to be shared between HKECIC and the Policyholder, and the amount of recovery to which HKECIC is entitled is as follows:                                                                               Amount of recovery x Claim payment / Total indebtedness owed by the buyer to the Policyholder as at the date of claim payment

You must pay HKECIC's as soon as practicable, and in any event not later than one month after the date of receipt of such recoveries.

Question 11

Will HKECIC share the costs incurred for taking the loss minimisation actions against the buyer/client?

Accepted Answer

Yes, HKECIC will reimburse you up to 90% of the unrecovered legal costs or charges incurred solely for the purpose of preventing or minimising losses as long as you have obtained our prior written approval. However, HKECIC will not share any costs or charges relating to the resolution or the settlement of any dispute between you and your buyer/client.

Question 12

What is a Credit Limit?

Accepted Answer

It is the maximum amount of loss covered on a particular buyer. It may contain additional conditions of cover forming part of the Policy.

Question 13

What information is required when I apply for a credit limit?

Accepted Answer

In general, below information is required for credit limit application:1. Contractual buyer information including name and address 2. Credit limit application amount and payment term3. Order detail 4. Trading history

Question 14

Will the shipment/service be covered if it was made/rendered before the effective date of the credit limit?

Accepted Answer

Small Business Policy (SBP) / Self-Underwritten Policy (SUP):

Unless otherwise stated, any credit limit issued will have retrospective effect from the policy commencement date.

Online Micro-Business Policy (OMBP):

No. The shipment must be made/ service must be rendered within the effective period of the credit limit.

Question 15

If the approved credit limit is not enough to cover my upcoming order, can I request for a larger credit limit for cover?

Accepted Answer

Small Business Policy (SBP) / Self-Underwritten Policy (SUP):

Yes, you can apply for an increase in credit limit anytime.

Online Micro-Business Policy (OMBP):

Yes, you can apply for an increase in credit limit once within the credit limit effective period. Application must be submitted within 60 days from the credit limit effective date. Additional premium will be charged upon the increase in credit limit amount.

Question 16

Can HKECIC reduce or cancel a credit limit?

Accepted Answer

When there are adverse developments relating to the cover, we may consider revising or canceling the credit limit. If the credit limit is scarcely or not utilized at all, we may also consider to revise or cancel it. 
For Online Micro-Business Policy (OMBP), the credit limit is automatically cancelled without further notice on the day when there is any amount which remains unpaid by the buyer/ client for more than 30 days from the due date or the buyer/ client becomes insolvent.

Question 17

Can I cancel an approved credit limit?

Accepted Answer

Small Business Policy (SBP) / Self-Underwritten Policy (SUP):

If you want to cancel an approved credit limit, you may submit the request via EC-Reach.

Online Micro-Business Policy (OMBP):

Not allowed.

Question 18

Can I cancel/ amend a pending CL application?

Accepted Answer

Small Business Policy (SBP) / Self-Underwritten Policy (SUP):

If you want to cancel/amend a pending CL application, you may submit the request via EC-Reach.

Online Micro-Business Policy (OMBP)

Not allowed.

Question 19

How long does it take for a credit limit to be approved?

Accepted Answer

We may already have detailed information on the buyer concerned, in which case a credit limit can normally be approved within three to four days. If we have to get information from information agencies abroad, the speed of their replies depends on the conditions prevailing in the country concerned.

Question 20

Can I disclose the credit limit issued by HKECIC to the buyer/client?

Accepted Answer

There is a requirement under the Policy that the details of the Policy, which include but not limited to discussions, information and correspondence in connection with the credit limit, are to be treated as strictly confidential.

Question 21

Can HKECIC disclose the reasons for restricting or refusing cover on my buyer/ client?

Accepted Answer

As we have given undertakings to our providers of credit reports that we will not disclose the contents of their reports to any other party, it is not possible for us to advise you of the specific details why a particular buyer cannot be covered or can only be partly covered.

Question 22

I receive orders from different companies of a multinational group. Do I have to apply credit limit for each of the company I deal with? Can I apply for one group credit limit for the whole group?

Accepted Answer

No. You need to apply for a credit limit for each company that places order to you.

Question 23

Do I have to apply a credit limit every time when I have a shipment to make to a buyer ?

Accepted Answer

Normally not, as the credit limit is "revolving". When payments are received from your buyer, further shipments can go forward under the cover, provided that the maximum amount of credit outstanding at any one time does not exceed the credit limit amount and the payment terms are not longer or more risky than the ones shown in the credit limit.

Question 24

If a claim is submitted, will my credit limit on the same buyer be affected?

Accepted Answer

Yes, if claim is submitted on a buyer, the credit limit on this buyer will be cancelled.

Question 25

What is a Credit Checking Facility (CCF)?

Accepted Answer

Credit Checking Facility is the maximum number of free credit limit applications, please refer to policy schedule for detail.

Question 26

Is there any service fee for a credit limit application?

Accepted Answer

Small Business Policy (SBP) / Self-Underwritten Policy (SUP):

Each policy period, you could enjoy a number of CCF (listed in Policy Schedule). Additional cost would be charged for any extra credit limit applications.

Online Micro-Business Policy (OMBP):

You may submit up to a specified credit limit application for free during a 12 month period. It counts from the application date of the first credit limit.

Question 27

Is declaration on shipment/services a must?

Accepted Answer

Online Micro-Business Policy (OMBP) / Self-Underwritten Policy (SUP):

Declaration on shipment/services is not needed, but supporting documents on such shipment/services should be submitted when lodging claims.

Small Business Policy (SBP):

You must declare to us all exports and re-exports from Hong Kong and from the countries (or places) of shipment specified in Schedule II under payment terms of DP, DA or OA with a credit period of not more than 120 days (except shipments made to those buyers on which ECIC has refused cover in writing). For shipments concluded on credit terms such as “Cash Against Document” and “Documentary Sight Draft”, please declare to us on DP term of payment. If your buyer makes T.T. payment (Telegraphic Transfer) to you after you have made the shipment, please declare such shipments to us on OA term of payment. Under the terms of Policy, all such insurable exports are to be declared, and thus is regardless of whether or not you hold a credit limit on such buyers. You are therefore reminded to apply for credit limits on all your buyers.

Question 28

What happen if I forget to do declaration or declare late for my insurable shipments/contracts? (SBP only)

Accepted Answer

We will not meet any claim if you fail to declare all your insurable shipments/contracts. We reserve the right not to accept any declarations made later and in that case we may well have no liability if the shipments/contracts involved are not paid for in due course.

Question 29

Does HKECIC cover shipment that is exported outside Hong Kong?

Accepted Answer

Yes, but only restricted to the countries/markets listed on policy schedule.

Question 30

How to apply for the policy? What document(s) and information should be submitted when applying for the policy?

Accepted Answer

Please apply for it on our EC-Reach website (www.ec-reach.com.hk).  For application, you need to upload the Business Registration Certificate copy and provide company information.

Question 31

What kind of companies are eligible to apply for the policy?

Accepted Answer

Exporting companies which are doing business in Hong Kong with valid Business Registration and annual turnover less than HK$30 million are eligible for Online Micro-Business Policy (OMBP), annual turnover less than HK$50 million are eligible for Small Business Policy (SBP) and Self-Underwritten Policy (SUP).

Question 32

How long does the policy run?

Accepted Answer

For Online Micro-Business Policy (OMBP), the policy runs without expiry unless terminated by either you or HKECIC. For Small Business Policy (SBP)/Self-Underwritten Policy (SUP), the policy period is 12 months and you can renew the policy via EC-Reach.

Question 33

How can Online Micro-Business Policy (OMBP) policy be terminated?

Accepted Answer

You may terminate the OMBP at any time via EC-Reach and all credit limits under the policy will expire on the date of termination.

Question 34

Is the proof of annual turnover needed to submit during policy application?

Accepted Answer

No, but you need to declare its annual sales turnover is below HK$30 million/HK$50 million in the policy application form and credit limit application form.

Question 35

When do I need to submit annual turnover proof?

Accepted Answer

During claims examination, HKECIC has the right to check whether the policyholder has valid proof of annual turnover.  Proof of annual turnover included financial statement or other supporting document.

Question 36

If I am holding other HKECIC’s policy, can I apply for the another policy at the same time?

Accepted Answer

Yes, you can apply for a new policy, but the new policy can only commence after the termination of other the HKECIC policy.  Please contact our customer service officer.

Question 37

What is the Indemnity Ratio?

Accepted Answer

Indemnity ratio is the percentage of each insured loss that is indemnified by the insurer.

Question 38

How to calculate the premium?

Accepted Answer

Online Micro-Business Policy (OMBP) -  Premium shall be charged per credit limit (i.e. credit limit amount x premium rate%)Small Business Policy (SBP) -  Premium shall be charged per declared shipment or contract (i.e. shipment or contract amount x premium rate%)Self-Underwritten Policy (SUP) - Premium shall be charged per maximum liability (i.e. maximum liability amount x premium rate%)

Question 39

How do I pay premium?

Accepted Answer

HKECIC accepts payments made by credit card or FPS.

Question 40

Can I get refund of the premium paid for no claims during the policy year?

Accepted Answer

No. Any premium paid is not refundable.

Question 41

Can I get refund for the premium paid if I have not shipped the goods/rendered any services?

Accepted Answer

No. Any premium paid is not refundable. Please contact our customer service officer.

Question 42

Can I apply for credit limits for all of my overseas buyers?

Accepted Answer

For Online Micro-Business Policy (OMBP) &  Self-Underwritten Policy (SUP):

Yes. However, please be reminded that there is a maximum number of credit limit application under your policy (listed in Policy Schedule).

For Small Business Policy (SBP):

You must apply credit limits for all your overseas buyers if you are trading on credit terms (Whole insurable turnover). If no valid credit limit has been established for the buyer, no claim will become payable in case of a loss incurred even if you have declared the shipments to us.

Question 43

What is meant by whole insurable turnover and why is it required under the Policy? (SBP only)

Accepted Answer

Whole insurable turnover means that you must declare to HKECIC all your insurable shipments to your overseas buyers. The only exceptions are shipments to those buyers on whom HKECIC has refused cover in writing or excluded in writing, and shipments to your associate or subsidiary companies. We, like any other insurers, continuously aim at enlarging our spread of risks. By following the whole insurable turnover requirement, we can achieve a better spread of risks so as to offer the lowest possible premium rates to you. We will not meet any claim if you fail to declare all your insurable shipments.

Question 44

Who is my contractual buyer?

Accepted Answer

Your contractual buyer is the one who has the contractual obligation to pay for your goods, but not the agent nor the consignee.

Question 45

Will HKECIC check whether my sales contract fulfils HKECIC's policy requirement?

Accepted Answer

No.

Question 46

Do I need to have a written contract of sale/service contract with the buyer/client? Is oral contract covered by HKECIC?

Accepted Answer

The contract must be in force before shipment or services rendered and be evidenced in writing. We do not cover oral contracts which cannot be supported by documentary evidence.

Question 47

My buyer/ client places orders through emails. Is it covered by HKECIC?

Accepted Answer

The content of the email orders must fulfill the policy requirements of insurable contract and relevant documents are required to prove the contractual relationship between you and the buyer. For example, a sales contract or pro-forma invoice confirmed by the buyer.

Question 48

When must the insurable contract in force?

Accepted Answer

The insurable contract must be in force before shipment and/or services rendered and be evidenced in writing.

常見問題

常見的問題和答案