Credit Insurance - Coface Terms & Conditions
Please note that in this contract:
- terms in heavy type are defined (refer Definitions)
- values corresponding to the terms in italics are specified in the relevant Schedule (see specimen schedule here)
All references to ‘we’ and ‘us’ in the General Provisions and the Modules shall be construed as follows:
Compagnie Française d’Assurance pour le Commerce Extérieur S.A. (trading in the UK as Coface UK) (the ‘Insurer’) in relation to the Credit Insurance Schedule; and
Coface UK Services Limited (the ‘Service Provider’) in relation to the Service Schedule
(each the ‘Schedule’ and together the ‘Schedules’)
Table of Contents
Click on a section below to view it's description
- The credit insurance cover and provision of services
- Risk management
- Claim payment
- Assignment of the rights of this contract – assignment of debt
- Advising us of changes
- Right of discovery
- Observance of the terms of this contract
1.1 Commencement of cover
Provided that the delivery or the shipment of the goods, or the performance of the services, is carried out within the contract period and that the corresponding invoices are sent to the buyer within the maximum invoicing period, the credit insurance cover and services we provide, for all undisputed debts to which the contract applies, will start as follows:
i) for sale of goods
• in your country: on delivery,
• for export: on shipment of the goods, or, if the goods are already abroad (on consignment, in bonded warehouse or exhibited at a trade fair) on delivery.
ii) for services
upon performance of the services for which payment is due.
1.2.1 This contract does not cover any sales contract you make with a private individual or with an associated company.
1.2.2 This contract does not apply to any sales contract under which payment is to be received:
i) before delivery in your country and before shipment for export sales,
ii) by means of an irrevocable letter of credit confirmed by a bank registered in your country.
1.2.3 This contract does not cover any loss:
i) which is in excess of the credit limit,
ii) where you have not complied with any terms which may be attached to the credit limit,
iii) relating to deliveries, shipments or performance of services made after we have refused or cancelled a credit limit,
iv) relating to deliveries, shipments or performance of services made with:
• a buyer for whom a notification of adverse information or overdue account has, or should have been given, if the debt remains unpaid,
• with your prior knowledge, a buyer already declared insolvent,
v) arising from a failure, by you or any one acting on your behalf, to fulfil your obligations under any clause or condition of the sales contract,
vi) in the case of cash against documents sales, arising from the loss of control over the goods as a result of your failure to comply with any applicable rule or custom,
vii) relating to deliveries, shipments or performance of services made without the necessary licence or, more generally, in violation of any applicable law or regulation,
viii) arising directly or indirectly from:
• nuclear explosion or contamination, whatever its origin,
• war, whether declared or not, between two or more of the following countries: France – People’s Republic of China – Federation of Russia – The United Kingdom – The United States of America.
ix) sustained on interest for late payment or any penalties or damages.
1.2.4 Moreover, concerning the sales contract made with buyers domiciled in your country, this contract does not cover any loss arising from:
• sales contracts made with government departments and local authorities,
• consequences of a decision taken by the government of your country that hinder the execution of the sales contract or prevent the payment of the debt.
2.1 General Principles
You must exercise due care in granting credit to your buyers, with regard to both the amount and the period of credit, and must manage all business which is covered under this contract with at least the same diligence and prudence as you would reasonably be expected to exercise were it not insured. You must also use all reasonable endeavours to preserve your rights against both your buyers and any third parties.
You must keep for your own account any portion of the risk not covered by us, unless we agree in writing.
2.2 Credit Period
2.2.1 The initial credit period you grant your buyers must not exceed the maximum credit period.
2.2.2 You may grant one or more extension periods, provided that the total duration of the credit period does not exceed the maximum credit period.
2.2.3 You must obtain agreement from us before you extend a due date:
i) if the extended due date falls outside the maximum credit period,
ii) for a buyer on whom we have cancelled a credit limit,
iii) for a buyer for whom a notification of overdue account has, or should have, been made.
2.3 Notifications of Adverse Information or Overdue Account
You must submit a completed notification / collection form:
i) as soon as you become aware of any adverse information concerning a buyer,
ii) as soon as you have information indicating that a buyer has become insolvent,
iii) of any overdue account which remains unpaid at the time limit for notification of overdue account. In the case of cash against document sales, you will send us a notification of overdue account within 30 days of the arrival of the documents and the goods at the place of delivery.
iv) immediately of any sums you receive after you have notified us of an overdue account.
2.4 In case of overdue account you must take all measures as may be considered necessary, whether by you or by us, to prevent or minimise the consequences of the claim. You must pursue diligently and in good time any rights you may have over the debt, including rights to recover goods or to protect your or our rights or to secure the payment of the debt.
3.1 Payment level
We will pay the insured percentage of the net debt or of the credit limit if the net debt exceeds the credit limit.
3.2 Conditions of payment
The claim payment can only be made if you have duly complied with all the terms of this contract and have sent us all written evidence of the debt and any security obtained and, if applicable, of the insolvency of the buyer.
We shall have full rights of subrogation to all your rights and actions in relation to the principal and the interests of the insured debt and to the security attached to it. You will give us any documents or titles we may require to exercise this subrogation effectively and will make any assignments or transfers required in our favour.
The subrogation will not relieve you of your obligation to take any such measures as may be deemed necessary to recover the debt and to comply with our instructions.
3.4 Disputed debts
In the event of a dispute arising in connection with the debt, cover is suspended in respect of a claim until the dispute is resolved in your favour by arbitration or by a final court decision, binding on both parties and enforceable in the buyer's country.
3.5 Return of payment
We may require a claim payment to be returned to us if it subsequently appears that such a claim should not have been paid under the provisions of this contract and if, in the case of insolvency of the buyer, the debt is not subsequently admitted to rank for payment in the insolvency.
3.6 Maximum liability
The total amount paid in respect of the claims relating to debts arising from risks in a single contract period will not exceed the maximum liability.
You may only assign your rights to payment of claims to a third party (namely the Loss Payee) with our prior written consent. Your obligations under this contract will remain unaffected. The loss payee will have no more rights to payment than you, and our rights under this contract shall continue to be exercisable notwithstanding the assignment.
You may assign the debts to the financial institution acting as the loss payee, provided that you have assigned the right to payment of claims as described above.
Any moneys owed to the Insurer are deemed owed to the Service Provider and any moneys owed to the Service Provider are deemed owed to the Insurer.
The Insurer and Service Provider may deduct from any moneys received by them any moneys due or becoming due to them from the client.
You will pay all amounts due from you under this contract as they fall due and will not be able to offset any payment you may consider we owe you, even if we recognise that a claim is payable.
The payments of the contract payment will not alone give us the obligation to pay for a loss, as the loss will in any case be subject to the terms of this contract.
If we are instructed to recover a debt on your behalf and as a result either of your delay or failure in advising us of payments or providing us with documentation, then we reserve the right to charge you any additional fees, costs and expenses incurred by us.
If the invoices are issued in a currency other than the currency provided for in the Schedule, the receipts will be converted into the currency of this contract, as follows:
for calculating the net debt:
at the exchange rate in force on the last working day of the month that the relevant invoice was issued with any payments received in respect of that invoice being converted at the same rate.
for the amounts recovered after payment of claim:
at the actual rate when you or we collected such amounts or failing such rate, the exchange rate on the value date mentioned on the bank credit note.
You must inform us within 10 days of any substantial change in the information given that forms part of the contract, particularly in the nature or the scope of your activities or in your legal status.
We reserve the right, if your company is in state of insolvency or in case you cease your business activity, to terminate this contract with effect from the relevant event.
You undertake to allow us to exercise the right of discovery, and particularly you will provide us with any documents and/or certified copies relating to your sales contracts and will allow us to make any check, including verifying whether you have fulfilled your obligations and made your declarations in a complete, exact and truthful manner.
9.1 If you do not make the contract payments, in whole or in part, within fifteen days of receiving a registered reminder from us, cover will be suspended for all of the debts. Cover will not be valid again until all outstanding payments and the applicable interest and costs have been paid. We also reserve the right to terminate this contract.
9.2 We have the right to terminate this contract, refuse to pay any claim and require any claim payment to be returned to us if any statement you made to us was false or incomplete especially when you applied for this contract, when you made a request for a credit limit or when a cause of loss occurs.
9.3 Any other failure to fulfil your obligations under this contract will forfeit your right to cover for the debts concerned and if a claim payment has already been made for this debt, you undertake to reimburse us for such payment.
9.4 In the event that cover is forfeited or suspended, or in the event that due to the nonobservance of the terms specified in this contract that this contract is terminated, no return of contract payments will be made by us and all contract payments payable will be immediately due.
Any event you may become aware of which has led or may lead to a deterioration of your buyer’s financial situation.
Any company directly or indirectly controlled by you, or which controls you directly or indirectly or is controlled directly or indirectly by the same company as controls you.
Cash against documents sales
Sales where the applicable terms of payment provide that you will keep title to the goods until full payment has been made to the body responsible for handing the documents of title over to the buyer.
Amount of one or more invoices owed by the buyer under a sales contract and falling within the scope of this contract.
The goods are considered delivered when they have been made available to the buyer or any person acting on his behalf, at the place and on the terms specified in the sales contract.
In the case of cash against documents sales, delivery occurs when the goods and documents of title arrive at the place of delivery.
Any disagreement regarding the amount of a debt or the validity of your rights or debts, including any disagreement about setting off sums you may owe your buyer.
Date when the buyer must pay for the debt according to the sales contract.
Insolvency shall be deemed to occur in any of the following cases:
- the buyer has been declared bankrupt;
- a resolution is passed to wind the buyer up;
- an order for the winding up of the buyer has been made on the ground that he is insolvent;
- an order for Administration of the buyer’s affairs has been made by a court for the benefit of his creditors;
- in the course of execution of a judgment obtained against the buyer, the levy of execution has not satisfied the debt either in full or in part;
- the buyer has made a valid assignment, or composition or other arrangement for the benefit of his creditors generally;
- a Receiver is appointed on behalf of debenture holders or other creditors or the buyer;
- such conditions exist as are, by any other system of law, substantially equivalent in effect to any of the foregoing conditions. And references to the buyer being insolvent shall be construed accordingly.
Corresponds to the balance of a loss account including:
on the debit side:
the amount of the invoices, covered under this contract, issued for the goods sold or services performed, including, as appropriate:
on the debit side:
- the VAT, if this tax is covered under this contract,
- any interest payable up to the due date, but none that accrues thereafter,
- the packing, transport, insurance costs and any taxes owed by the buyer, with the exclusion of any interests for late payment and any penalties or damages;
- the amount of any recoveries received by you or by us up to the date of drawing up of the loss account and the total amount of the expenses that you did not have to pay as a result of the loss.
Non-payment of the debt by the buyer on the date, in the currency and in the place specified in the sales contract.
Notice / Notification
The date you or we receive a written notice from us or you at your or our administrative address by mail, email, fax or by such electronic means as agreed upon by you and us in writing.
Notice to the Insurer is deemed to be valid notice to the Service Provider and notice to the Service Provider is deemed Notice to the Insurer.
When a debt to which the contract relates has not been paid on the date, in the currency and in the place specified in the sales contract.