Risks covered by MECIB

MECIB’s main objectives are to develop and promote exports from Malaysia by providing and giving insurance cover against some risks that relate to international trade and also giving guarantee in support of Malaysian exports. The following are risks that are covered by their insurance policies either short term, medium term or long term.
1. Commercial risks: Here, there is insolvency of the buyer and also the failure of the buyer to pay within a specific period of time i.e. 6 months after the due date for the goods that are delivered to and accepted by him/her. In more details, they cover the risk of the buyer being unwilling to accept or pay for the goods which have already been shipped or delivered which isn’t due to the quality dispute.

2. Non-commercial risks: Under this category, there is economic risk, political risk and other unforeseeable events. Starting with economic risk, the risks that are covered include blockage or delay in the transfer of payments to Malaysia and also the cancellation or not renewing the valid import and export licenses. Imposition of import restrictions in the country of the buyer after the goods have been delivered or shipped is also covered under the economic risk.

With unforeseeable events, it means any causes of loss happening or occurring outside Malaysia which are beyond either the buyer or exporter’s control.

Political risks too are covered. Here there is war between Malaysia and the buyer’s country, revolutions and other kinds of disturbances for example riots in the country of the buyer. There is protection of losses that may arise from the inability to convert for example the profits, dividends and loan repayments that are received in the local currency because of delays, any changes in the law and regulations and also lack of foreign exchange. MECIB also protects losses that can arise