Trade Finance
Export Insurance Beyond ECGC: Marine, Transit & Trade Credit
Marine cargo (ICC A/B/C), product liability, trade credit insurance from Euler Hermes/Coface/Atradius, political risk, and cost comparison.
By Aaryan Kakani · · 13 min read
Key takeaways
Most Indian exporters think of insurance as a single question: "Do I have ECGC cover?" If the answer is yes, they assume their exports are protected. In reality, ECGC covers only one risk. Buyer non-payment. The journey of an export shipment involves a chain of risks that ECGC does not touch: physical damage during ocean transit, theft at a bonded warehouse, a product liability claim from an end consumer in the US, or a government in Africa expropriating your buyer's assets and freezing the entire market.
Each of these risks has a dedicated insurance product designed to cover it. The problem is that most exporters (particularly MSMEs) either do not know these products exist, or assume they are too expensive. This guide covers every insurance layer an Indian exporter should evaluate, with actual cost ranges, provider names, and a framework for deciding which policies are worth carrying based on your export profile.
If you are new to export credit insurance, start with our complete ECGC guide first. This article assumes you understand the basics of ECGC and focuses on what lies beyond it.
The Full Spectrum of Export Risks
An export transaction, from the moment goods leave your factory gate to the moment you receive payment, is exposed to at least six distinct categories of risk. Understanding these categories is the first step to building a coherent insurance programme.
| Risk category | What can go wrong | Insurance product |
|---|---|---|
| Buyer non-payment | Buyer insolvency, refusal, or country restrictions | ECGC / Trade credit |
| Physical loss in transit | Container overboard, fire, rough seas, theft at port | Marine cargo insurance |
| Storage and handling | CFS damage, warehouse fire, inland transit mishap | Transit / warehousing |
| Product defect liability | Consumer injury, recall, contamination claim | Product liability |
| Sovereign / political action | Expropriation, currency inconvertibility, contract frustration | Political risk insurance |
| Trade dispute | Quality claims, short shipment, arbitration | Legal expenses insurance |
ECGC addresses only the first row. For many exporters, physical loss during transit is actually a more frequent risk than buyer default. The rest of this guide works through each risk category. What the insurance covers, what it costs, who the providers are, and when it makes sense to buy it.
ECGC Recap and Its Limitations
Before looking at what lies beyond ECGC, it helps to be precise about what ECGC actually does. The Export Credit Guarantee Corporation provides credit insurance that covers you when an overseas buyer fails to pay. Either because of commercial reasons (insolvency, protracted default) or political reasons (war, import restrictions, forex unavailability). Under the NIRVIK scheme, ECGC now covers 90% of the principal and interest.
ECGC is excellent at what it does. But its scope is deliberately narrow. Here are the boundaries:
What ECGC does not cover
- Physical loss or damage to goods. If your container sinks, ECGC pays nothing. Marine cargo insurance is a separate product entirely.
- Product liability claims. If your product injures a consumer in the US and you face a $2 million lawsuit, ECGC has no role. You need product liability insurance.
- Goods at rest in warehouses. ECGC does not cover goods stored at CFS yards, bonded warehouses, or free trade zones. Transit and storage insurance handles this.
- Asset expropriation. If you have invested in a warehouse or distribution setup in the buyer's country and the government nationalises it, ECGC does not cover capital losses. Political risk insurance does.
- Quality disputes. If the buyer refuses to pay because they claim the goods do not meet specifications, ECGC will not cover the loss if the dispute has merit. This falls under trade dispute resolution , not insurance.
- Exchange rate losses. If the rupee appreciates between shipment and payment, eroding your margin, ECGC does not compensate. Currency hedging is a separate treasury function.
ECGC also has structural constraints: whole-turnover requirements, 15-21 day BCL turnaround, mandatory 4-month claim waiting periods, and potential coverage declination for C2-category countries. These reflect its focused purpose as a credit insurer, but they mean an exporter relying solely on ECGC has significant gaps.
Marine Cargo Insurance: ICC Clauses A, B, and C
Marine cargo insurance is the oldest form of commercial insurance in the world and remains the most critical physical-risk cover for exporters. It protects against loss or damage to goods during ocean, air, or multimodal transit. For a detailed deep dive, see our marine cargo insurance guide . Here, we cover the essentials every exporter needs to know.
The ICC Clauses Explained
Marine cargo insurance policies in India follow the Institute Cargo Clauses (ICC) issued by the Institute of London Underwriters. There are three standard clause sets, each providing a different level of coverage:
| Clause | Coverage | What it covers | Premium |
|---|---|---|---|
| ICC Clause A | All risks | All causes except war, strikes, inherent vice, wilful misconduct, delay. Widest cover. | 0.10-0.50% |
| ICC Clause B | Named perils (broad) | Fire, explosion, sinking, collision, jettison, washing overboard, earthquake, lightning, water entry. | 0.08-0.30% |
| ICC Clause C | Named perils (restricted) | Major casualties only: sinking, collision, fire, explosion, jettison. No theft, water damage, or handling. | 0.05-0.15% |
For most exporters, ICC Clause A is the right choice. The premium difference versus Clause C is marginal (0.05-0.15%), but Clause C excludes theft, water damage, and handling. Three of the most common loss causes. Standard ICC clauses exclude war and strikes; add war risk and SRCC riders if your route passes through the Red Sea, the Persian Gulf, West Africa, or active conflict areas. War risk premiums for Red Sea transit surged from 0.02% to over 0.50% in recent years. The Persian Gulf belongs on that list as of 2026: the Strait of Hormuz has been effectively closed to routine commercial shipping since July 2026, so any sailing to Jebel Ali, Dammam, Hamad Port, Kuwait or Bahrain is a war-risk route now. Current premiums for Gulf transit are not stated here. They have been moving, and the published figures are tanker-market numbers that do not transfer to containerised cargo. Get a quote for your actual voyage.
Open Cover vs Specific Voyage Policies
Regular exporters should use an open cover policy. A standing agreement that automatically covers all shipments during the policy period. You declare shipments as they happen (or monthly), and get better rates, faster documentation, and automatic coverage even if you miss a declaration.
Under CIF and CIP Incoterms , the seller must insure for at least 110% of CIF value. CIP requires Clause A (all risks) while CIF requires only Clause C (minimum cover).
Major marine cargo insurers in India include New India Assurance (largest general insurer, competitive rates), United India Insurance (strong surveyor network at Indian ports), ICICI Lombard / HDFC ERGO / Bajaj Allianz (faster online documentation), and Tata AIG (strong for high-value goods via the global AIG network).
Transit and Warehousing Insurance
Standard marine cargo insurance covers goods during the main voyage, but what about the legs before and after? Goods moving by truck from your factory to the port, sitting in a CFS (Container Freight Station) for two weeks awaiting vessel booking, or stored at a bonded warehouse in the destination country before customs clearance. These intermediate stages can be surprisingly risky.
Most marine cargo policies include a "warehouse to warehouse" clause, but with a time limit. Typically 60 days from discharge at the final port. Goods sitting beyond that window become uninsured. CFS yards and bonded warehouses in India carry their own risks:
- Water damage from leaking roofs. Particularly during monsoon season (June to September), CFS facilities in Mumbai, Chennai, and Kolkata are prone to waterlogging that can damage stored cargo.
- Fire. Warehouse fires are infrequent but catastrophic. A single fire at a CFS can destroy cargo belonging to dozens of exporters.
- Theft and pilferage. Cargo left at open yards or poorly secured warehouses is vulnerable to theft, particularly high-value goods like electronics, textiles, and pharmaceuticals.
- Handling damage. Forklift accidents, improper stacking, and rough handling during container stuffing can damage goods before they even reach the vessel.
The simplest fix is extending your marine cargo open cover's warehouse clause to 90 or 120 days. For exporters who routinely store goods longer (e.g., Amazon FBA sellers or those with distribution centres abroad), a stock throughput policy (STP) combines storage and transit in a single policy, eliminating coverage gaps as goods move between regimes.
Product Liability Insurance
Product liability insurance is the most underappreciated risk for Indian exporters. And potentially the most expensive to ignore. If a product you manufacture and export causes injury to a consumer, damages property, or is recalled due to a safety defect, you can face lawsuits in the destination country's legal system. In the US, a single product liability verdict can run into millions of dollars.
Why US and EU Markets Require It
In the US, product liability operates under strict liability. The manufacturer is liable regardless of negligence. The EU's Product Liability Directive (revised 2024) similarly makes producers liable for defective products, including digital products. Practically, US and EU buyers will not place orders with Indian manufacturers who lack product liability insurance. It is a standard requirement in buyer qualification and supply agreements.
Product liability insurance covers legal defence costs (which alone can exceed $500,000 in the US), compensatory damages, property damage caused by your product, product recall expenses (usually an add-on), and completed operations liability for products already delivered and in use.
Coverage Limits and Costs
| Product category | US premium | EU premium | Typical limit |
|---|---|---|---|
| Textiles / garments | 0.15-0.30% | 0.10-0.20% |