Did you know... Including a 'third-party country risk' clause can be very useful?

Published on 28/03/2018

Suppose you agree with your debtor to deliver the goods (or service) in a third country. A political situation in that third country causes the goods to disappear or be damaged, which makes the debtor unwilling to pay. This loss is not routinely covered by all insurers: the policy then states that any losses related to the third country are excluded from cover.

Third-country risk clause

However, by including a so-called 'third country risk' clause in the policy, you are insured against the loss. You would be wise to include this clause if political risks are to be expected in the country of delivery. The additional cover then applies to political situations such as war, transfer risk, revocation of export licences or moratorium.

So, to be clear, this only covers losses related to the situation in the (third) country of delivery. Under the standard provisions of the policy, you remain insured against the debtor's possible payment insolvency due to situations related to the country of residence.

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