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Types of risk insured

Trade credit insurance risks are ordinarily classified into commercial and political risks:

1. •

   a ‘commercial risk’ is typically defined as the insolvency of the insured's buyer resulting in a payment default or the buyer's failure to pay for the goods on the due date

2. •

   a ‘political risk’ is typically defined as the risk that a government buyer or country prevents the fulfilment of a transaction or fails to meet its payment obligations. Examples include:

   1. â—¦

      regulatory or legislative payment freezes

   2. â—¦

      expropriation and confiscation of goods

   3. â—¦

      import and export embargoes

   4. â—¦

      unforeseeable extraordinary