Insurance of manufacturing costs
What is production costs insurance?
Insurance of manufacturing costs is a supplementary solution intended for policyhilders who are interested in expanding the insurance cover for the period prior to the shipment of the goods which is not covered in the framework of basic credit insurance and thus to create continuous protection: from the stage of receiving the order until receiving the customer's payment.
Highlights of the program
Insuring production costs provides cover for the costs invested from the date of the customer's order shouldone of the following events occure in the manufacturing peruid:
- Insolvency of the customer as a result of liquidation, receivership, etc.
- A political event in the customer's country (valid for cutomers outside of Israel).
- Cancellation of the insurance cover of ICIC to the delivery stage, after receiving the order.
In each of these insured events, the insurance covers the specific costs invested in preparing the customer's order.
Advantages of production costs insurance with ICIC
- Creating insurance continuity – insuring production costs completes the insurance protection to ICIC's insured which is exposed from the beginning of the manufacturing period and up to the payment due date.
- Reducing exposure to damages: the more unique the manufacturing process and the longer the period of manufacturing,, so the risk of economic damage increases in the event that the customer will not be able to purchase the products that it ordered. Production cost insurance reduces the insured's exposure to these damages.
- Protection of various terms of payment: insurance of production costs from the order stage provides protection also when the terms of delivery are cash or through a documentary letter of credit which is customary in international trade. The insurance protection in this case covers the period until payment or the opening of the documentary credit in favor of the insured.
- Cover of a range of insured events: insolvency of the customer, a political event in the customer's country and cancellation of ICIC's insurance at the delivery stage after the insured received the order.
- Insurance cover for a specific transaction – insurance of production costs can be purchased as cover for a specific transaction there is no need to present a portfolio or dispersion for insurance.