Trade Credit Insurance
Domestic and export receivables under one policy
The risk that goods are delivered but payment never arrives applies to Korean customers and overseas buyers alike. Trade credit insurance sets a credit limit for each buyer in advance and, if receivables supplied within that limit go unpaid because of insolvency or protracted default, pays the agreed percentage of the loss. Domestic and export receivables can be managed together under a single policy.
Last updated 2026-10-03 · next review 2027-04-03 · Premiums, limits and acceptance are determined by the insurer after underwriting
Trade credit insurance covers the loss when payment for goods or services supplied on credit is not received because the buyer becomes insolvent or defaults for a prolonged period.
- Who it is for: manufacturers, distributors and exporters selling business-to-business (B2B) on short credit terms — typically up to 180 days
- What it covers: unpaid receivables supplied within the credit limit approved by the insurer for each buyer, paid at the agreed indemnity percentage (insolvency and protracted default)
- Not covered / common gaps: supplies before a limit is approved or above the limit, supplies made after an overdue payment, non-payment due to quality disputes, and financial claims such as loans
- Placement structure: the policy is issued by SGI Seoul Guarantee (primary insurer) with Coface participating as reinsurer and setting buyer credit limits — domestic and export receivables can be combined in one policy
- Compulsory? No — taken out to manage credit risk and buyer concentration
- Premium: determined by the insurer after underwriting
01 · Who should consider it?
- Open-account (O/A) exports are growing — more shipments are made on credit without a letter of credit
- A high share of domestic sales is on credit — a Korean customer's default falls entirely on your balance sheet
- Sales are concentrated in a few buyers — one buyer's failure could disrupt the whole company's cash flow
- Many new markets or new buyers — there is little trading history on which to judge creditworthiness
- Only exports are covered — you use a public export credit scheme but domestic receivables are uninsured
02 · Who issues the policy and who sets the limits?
The trade credit insurance we broker is issued by SGI Seoul Guarantee as the primary insurer, with Coface, a global credit insurer, participating as reinsurer and carrying out buyer credit checks and limit decisions. Export receivables are underwritten under the same structure, and domestic and export receivables can be managed under a single policy.
| Role | Details |
|---|---|
| Policy issuer (primary) | SGI Seoul Guarantee — receives premiums and handles claims with the policyholder |
| Reinsurance & limits | Coface — credit checks and credit limits for each domestic customer and overseas buyer, with monitoring during the policy period |
| Scope | Domestic receivables, export receivables, or both combined in one policy |
| Broker's role | Preparing the questionnaire and buyer list, requesting pre-screening, comparing and explaining terms, and supporting limit checks and claim notifications after placement |
Credit insurance is bought by the seller (creditor) for its own protection. It differs in structure from surety bonds, where the buyer obtains a guarantee in favour of the seller; this page covers credit insurance only.
03 · Already using a public export credit scheme?
Public export credit schemes such as the Korea Trade Insurance Corporation (K-SURE) and private credit insurance are not better or worse than each other — they are designed for different purposes. Public schemes prioritise standardisation and accessibility; private credit insurance prioritises individual buyer underwriting and combined domestic-and-export cover.
Under the placement structure we have confirmed, private cover is not added on top of a public scheme's limits (top-up). Instead, the two are compared side by side and one is chosen (switch). When comparing, please also note:
- Public schemes are designed with a higher indemnity percentage. Looking only at recovery on a single loss, a public scheme may be more favourable.
- The comparison point for private cover is not the indemnity percentage but the scope of receivables covered (including domestic sales) and the size of each buyer's limit.
- Cancelling an existing policy to take out a new one may lead to declined acceptance or different terms, so decide on a switch only after confirming the new policy's terms.
04 · What is covered and what is not?
Covered — losses on receivables supplied during the policy period within the approved credit limit that are not paid for the reasons below, paid at the agreed indemnity percentage rather than in full. An annual aggregate limit also applies.
- Insolvency — the buyer's bankruptcy, default on bills, or commencement of rehabilitation proceedings
- Protracted default — the buyer is not bankrupt but payment remains outstanding after the due date (paid after the agreed waiting period)
Not covered / frequent gaps — most credit insurance disputes arise from operational points rather than the insured risk itself.
- Buyers without an approved limit, supplies above the limit, and shipments made before the limit was approved
- Goods supplied after a payment became overdue
- Sales invoiced after the invoicing deadline stated in the policy
- Receivables shipped before the policy period or already overdue at inception
- Commercial disputes, such as a buyer refusing payment over alleged quality defects
- Failure to take loss-mitigation steps (chasing payment, recovering goods, securing the receivable) once a loss is expected or has occurred
- Financial receivables such as loans or investments, consumer (B2C) sales and sales to affiliates
The policy schedule and wording determine the actual scope of cover and exclusions. If the insurer reduces or cancels a buyer's limit during the policy period, supplies made after that notice fall outside the cover.
05 · How do I apply?
- Consultation and questionnaire — company details, credit management practice, recent bad-debt history and the domestic/export sales mix
- Buyer list and pre-screening — submit the full buyer list and request pre-screening of a sample of buyers
- Proposed terms — scope, indemnity percentage, deductible, aggregate limit and premium, which we compare and explain
- Application and policy issue — limits for the remaining buyers are then assessed
- Ongoing administration and claims — sales declarations, limit checks, overdue notifications, claim notification and filing
Pre-screening tip. If only the most creditworthy buyers are submitted for pre-screening, actual approval results across the full buyer list may come out lower than expected. Including a balanced mix of stronger, average and weaker buyers gives a more realistic picture.
Useful documents: latest financial statements; annual sales split by domestic/export and by payment terms (cash, L/C, open account); buyer list (name, business registration number or country, annual turnover, payment terms, maximum outstanding balance, overdue status); recent bad-debt history; copies of any existing credit-related policies.
Frequently asked questions
Can domestic and export receivables be insured under one policy?
Yes. Domestic and export receivables can be combined in a policy issued by SGI Seoul Guarantee, or either can be insured separately. The actual scope and terms are determined by the insurer after underwriting.
Can it top up the limits of K-SURE short-term export insurance?
Under the placement structure we have confirmed, top-up cover above a public scheme's limits is not used; the two are compared and one is chosen. Public schemes are designed with a higher indemnity percentage, so scope of cover and buyer limits should be compared together.
How much is the premium?
It is based on insured turnover but varies with industry, payment terms, buyer mix and bad-debt history, so no premium or rate is shown on this page. The premium is determined by the insurer after underwriting.
Is late payment covered even if the buyer is not bankrupt?
Protracted default is normally covered. Because the claim is paid after the agreed waiting period, it takes longer than an insolvency claim, and cash flow in the meantime needs to be planned separately.
Can we apply with only a few buyers?
Sometimes, but with few buyers the risk is less diversified, so terms may differ or acceptance may be limited. Sales concentrated in one buyer need separate review, so it is quickest to start by looking at your buyer mix.
A buyer list is enough to get started
We handle the questionnaire, buyer pre-screening, proposed terms and their comparison. Our brokerage fee is paid by the insurer and is not added to the premium paid by the policyholder (Article 98 of the Insurance Business Act).
Request a credit insurance review →hanwook.seong@n2nib.com · +82-10-5755-6465
Further reading (Korean)
- Domestic trade credit insurance guide — how limits, claims and recoveries work
- Export credit insurance guide — coverage gaps and a 7-question self-check
This page explains the general structure of credit insurance and does not cite specific clause numbers or limit amounts. The policy schedule and wording prevail for scope of cover, exclusions and limits; acceptance and terms are determined by the insurer after underwriting.
Points to note
Please check the basics of the policy when you apply.
- When applying for the policy, please confirm the product name, policy period, premium-payment period and the insured , and be sure to receive and check the policy wording.
- Before concluding the contract, please read the product description and policy wording.
- If you cancel an existing policy to take out a new one, acceptance may be declined, the premium may rise and the cover may differ — please take note.
- Payment of the claim may be restricted by exclusions and payment-limitation grounds.
Nullity of the contract
If the insured event has already occurred at the time the contract is made, the contract is void. However, where the contract is void due to the company's intent or negligence, or where the company knew or could have known of the nullity before acceptance yet did not refund the premium, the company refunds the premium with interest at the policy-loan rate published by the Korea Insurance Development Institute, compounded annually, for the period from the day after payment to the day of refund.
Losses not covered
The specific losses not covered (exclusions) are set out in each insurer's policy wording and product description; the main exclusions are summarised in section 04 of this page. For other cover-specific grounds on which claims are not paid, please refer to the policy wording.
Cover start date
The company provides cover, in accordance with the policy, from the time it accepts the application and receives the first premium. Where the company accepts the application after receiving the first premium with it, cover also begins from the time the first premium was received.
Policyholder's handwritten signature
The application must be completed by the policyholder, and the policyholder and the insured must sign it by hand. Failure to sign by hand may result in disadvantages regarding the validity of the contract. On an internet cyber-mall, an electronic signature may be used instead.
Right to be informed and have the product explained
The policyholder has the right to be given and have explained the information needed about the product they wish to buy.
Duty to explain
The insurer and N2N Insurance Brokerage must explain the important matters of the product to ordinary financial consumers.
Duty of disclosure before the contract
When applying, the policyholder, the insured or their agent must disclose truthfully the facts they know regarding the questions in the application (including the questionnaire). Otherwise the claim may be declined or the contract cancelled. Where insurance is taken out by telephone or other means of communication, the duty is performed by answering the seller's questions, which are recorded, without a separate written questionnaire, so answers must be given with particular care.
Duty of disclosure after the contract
If, after the contract is made, any of the following arises in respect of the subject-matter insured, the policyholder or the insured must notify the company in writing without delay and obtain endorsement on the policy.
- When intending to take out, or learning of, a contract with another insurer covering the same risk as this contract
- When transferring the subject-matter insured
- When altering, rebuilding or extending the subject-matter insured or the building housing it
- When moving the subject-matter insured to another location
- When the risk is, or is found to have been, materially changed
Withdrawal of the application
- The policyholder may withdraw the application within 15 daysof receiving the policy, in which case the premium paid is refunded. However, a contract more than 30 days after application (45 days where a policyholder aged 65+ contracted by telephone) cannot be withdrawn.
- In addition, a medical-examination contract, a contract with a cover period of 90 days or less, guarantee insurance, statutory compulsory insurance, liability insurance under the Automobile Accident Compensation Act, or a commercial-insurance contract concluded by a professional financial consumer cannot be withdrawn.
Quality-assurance scheme
- If, after application, the policyholder did not receive the policy wording and their copy of the application, was not given an explanation of the important contents of the wording, or did not sign the application by hand, they may cancel the contract within 3 monthsof the contract being formed.
- In that case the premium already paid is refunded to the policyholder, with interest at the policy-loan rate compounded annually for the period the premium was held.
Why the surrender value may be less than the premiums paid, or nil
The surrender value is the amount paid if the contract is cancelled early. Unlike bank savings, insurance combines risk protection and savings: part of the premium is paid out as claims to other policyholders who suffer accidents, and part covers the insurer's operating expenses, so the surrender value on early cancellation may be less than the premiums paid, or nil.
Depositor protection
- This policy is protected under the Depositor Protection Act, such that the surrender value (or the maturity benefit) plus other payments is protected up to “KRW 100 million per person” (aggregated with the insurer's other protected products).
- Separately, the aggregate accident-claim amount of that insurer's protected products is “KRW 100 million per person” protected.
- (However, a policy whose policyholder and premium payer is a corporation is not protected.)
Personal-data protection
Except as provided by law, the insurer and N2N Insurance Brokerage do not collect, use, inspect or provide personal data related to this contract — for its conclusion, maintenance and claim payment — without the consent of the policyholder, the insured or the beneficiary. However, for those purposes the insurer may, with the consent of the policyholder and the insured and in accordance with law, provide personal data to other insurers and insurance-related bodies.
Solicitation-order and reporting centre
- Providing special benefits in connection with concluding an insurance contract is punishable under the Insurance Business Act.
- Financial Supervisory Service: 1332 (no area code) / mobile (02)1332 / “Report a solicitation-order violation” at http://fss.or.kr
- General Insurance Association of Korea: 1332 (no area code) / mobile (02)1332 / “Solicitation-order Violation Report Centre” at http://knia.or.kr
FSS Insurance Fraud Prevention Centre
- Insurance crime, under Article 8 of the Special Act on the Prevention of Insurance Fraud, is punishable by up to 10 years' imprisonment or a fine of up to KRW 50 million, and abetting insurance crime is subject to the same punishment.
- Tel: 1332 (no area code) / mobile (02)1332 / Web: http://insucop.fss.or.kr or “Insurance Fraud Prevention Centre” at http://fss.or.kr
Insurance consultation and dispute mediation
- For consultation or any complaint or dispute about insurance, contact the insurer's customer call centre for prompt handling. If you object to the outcome, you may apply for dispute mediation to the Financial Supervisory Service and the Korea Consumer Agency.
- FSS Financial Consumer Protection Centre: 1332 (no area code) / http://fss.or.kr
- Korea Consumer Agency Consumer Counselling Centre: 1372 (no area code) / http://www.kca.go.kr
Notice
The above is a summary and excerpt of the policy wording; for grounds on which claims are not paid and other details, please refer to the policy wording and product description.
About N2N Insurance Brokerage
- N2N Insurance Brokerageis an insurance broker registered under Article 89 of the Insurance Business Act; it does not represent any single insurer but advises and intermediates on the side of the client (policyholder) (FSS Reg. No. 2026-012201 · Business Reg. No. 611-23-02374).
- An insurance broker intermediates the conclusion of insurance contracts on behalf of the policyholder and has no authority to conclude contracts or receive premiums on behalf of an insurer. Application and acceptance follow each insurer's policy wording and underwriting.
- Our brokerage fee is paid by the insurer and is not added to the premium paid by the policyholder (Article 98 of the Insurance Business Act).