Pre-Credit Insurance

If your exports have a long production period or you produce custom-made products then you may be exposed to losses in the event your buyer cancels or is unable to honour your contract prior to delivery.

Our Pre-Credit Insurance covers your production costs, net of your profit margin and any advance payments which you cannot recoup in the event of your buyer cancelling your contract.

This support is provided in conjunction with either our Short-Term Trade Credit Guarantee, or Export Credit Guarantee.

The benefits of our Pre-Credit Insurance include:

  • the mitigation of losses that may result from manufacturing a bespoke product for a buyer that subsequently cancels the contract;
  • the undertaking of due diligence by NZEC on your foreign buyer, which may provide you with peace of mind to trade with a new buyer (or not, if NZEC declines to approve cover); and
  • the confidence to enter into new export markets, particularly in higher-risk countries.

Our Pre-Credit Insurance covers your production loss which results from an unwarranted cancellation or dishonouring of your export contract prior to its completion.

The loss may be covered if it is as a result of specific commercial or political events covered under our policy. Examples include insolvency of the buyer prior to shipping; an unwarranted cancellation of the contract by the Buyer, or specific political events in the buyer’s country that prevent the goods being shipped.

Talk to our team for our full list of insurable events, and also visit Country Information to see our current country risk categorizations and cover status.

You apply for a credit limit which reflects your actual production costs less any deposits or milestones payments that you have received, as well as any unpaid invoices already submitted to your buyer (those invoiced amounts are covered under our Short-Term Trade Credit policy).

In calculating any claim, we do not cover lost profit margin. We also offset any amounts that you have received from the re-sale of your finished or partially finished export good(s).

Our typical level of cover on your pre-credit limit ranges between 80% and 90%. This means that you will retain some risk in the transaction.

Our policy does not cover contract cancellation if it is a result of your negligence, or a dispute between you and your buyer, unless you obtain a judicial or arbitration judgment in your favour.

Our cover can be issued in the following currencies: NZ dollar, Australian dollar, US dollar, Canadian dollar, the euro, Japanese yen, Chinese renminbi, or UK sterling.

Our Pre-Credit Insurance is only provided in conjunction with either a Short-term Trade Credit or Export Credit (post-shipment) policy from us as well. This recognises that the commercial and political risks that may cause contract cancellation or payment default are typically the same. Indeed, you may have the situation where your buyer cancels the contract when you have accumulated production costs as well as unpaid milestone invoices.

We undertake an assessment of the creditworthiness of your buyer and your buyer's country. This typically involves obtaining a credit report on your buyer, as well as seeking their financial accounts. If we approve both your Pre-Credit, and related Short-Term Trade Credit or Export Credit, applications then will we make you an offer and document the policies.

In the event of a contract cancellation and a claim under our Pre-Credit policy, there is normally a three month waiting period before we compensate you. We do not apply a waiting period if your buyer is declared bankrupt.

We recommend that you discuss your risk mitigation requirements with us as early as possible.  If you would like to email us an enquiry for our indicative feedback, please complete our information checklist.


Tel: +64 4 917 6060
Email: [email protected]

The key eligibility criteria for our support are:

  • confirmation that you are a New Zealand registered company or a subsidiary of a New Zealand registered company domiciled overseas;
  • evidence of a commercially sound transaction with a credit-worthy buyer or bank;
  • signed acknowledgment of our anti-bribery declaration;
  • evidence of economic benefits to New Zealand relating to your delivery of the goods and/or services provided under the export contract(s); and
  • a joint application for either Short-Term Trade Credit or Export Credit Guarantee.

To apply for Pre-Credit Insurance, please complete the application form:

As part of our assessment on your buyer and the underlying exports, we will seek the following information:

  • your buyer’s (and/or guarantor’s – if applicable) audited financial accounts (for the previous two years of trading PLUS the current year of trading);
  • a credit report (for example from Dun & Bradstreet) that has been conducted within the last three months; and
  • details of your prior trading history and any outstanding payments with this buyer.

This assessment is undertaken in conjunction with your Short Term Trade Credit or Export Credit application.

If we approve your application, we charge a premium for our cover which reflects the commercial and political risks, as well as the tenor and payment structure of your export transaction.

Our premium is charged as a fixed percentage and is applied against your pre-credit facility limit. Payment of the premium is made prior to the start of your export contract.