Purpose

This policy has been designed for companies performing works or services ( constructional works, installations, etc.) abroad.

CESCE insures the risks arising during the construction or execution phase of the works.

The product covers Spanish contractors for the final net loss they may incur as a consequence of:

  • Construction risks including pre-credit risk, refusal to certify, non-payment of progress certificates, non-payment of the credit (deferred payment),
  • Risk of confiscation or non-repatriation of the stock of machinery,
  • Risk of failure to transfer the working capital to Spain



Risks covered and maximum cover percentages

  • Commercial Risks: 99%
  • Political and Extraordinary Risks: 99%



Insurance Detail

  1. The Spanish constructor or installer negotiates a contract for the execution of works with his foreign customer.
  2. The Spanish constructor approaches CESCE for coverage under the Construction and Works Abroad Policy of construction risk (including preshipment risk, refusal to certify, non-payment of the progress certificates or of the credit by the foreign contracting party), of the risk of total or partial loss of machinery, and the risk of non-transfer of the working capital.
  3. Once the Construction Contract and the Works Abroad Insurance Policy have been formalised, the exporter sends the machinery (personnel, machinery and installations) to the foreign country, as well as the working capital needed for the execution of the works contracted.
  4. The Spanish constructor then starts to execute the construction contract.
  5. In the event of the performance of the contract being interrupted or impeded as a result of the risks covered under the insurance policy, CESCE will indemnify the Spanish constructor insured, pursuant to the terms set forth in the policy, for the final net loss deriving from the cessation of the works. The Spanish constructor by performing his contractual obligations originates the credit payable by the foreign contractor to the exporter as progress certificates are submitted him for settlement.
  6. In the event of non-payment by the foreign contractor as a result of the risks covered in the insurance policy, CESCE will indemnify the Spanish constructor insured, pursuant to the terms set forth under the policy, for the losses deriving from the non-payment of the progress certificates submitted and accepted, or from the refusal of the foreign contractor to certify the work actually carried out.
  7. Upon completion of the construction contract, the Spanish constructor will start to repatriate the machinery used in the execution of the works, as well as the working capital.
  8. In the event of the transfer of the working capital being interrupted or impeded on account of the risks covered under the policy, CESCE will indemnify the Spanish constructor for the losses incurred according to the terms set forth therein.
  9. If the repatriation of the machinery is interrupted or impeded on account of the risks covered under the policy, CESCE will indemnify the Spanish constructor insured for the total or partial loss of the equipment, stocks and ancillary facilities used by the insured in the execution of the works, according to the terms set forth therein.

SPECIAL CASES

BENEFICIARY BANK: The constructor may specify a financing institution as the beneficiary of his right to compensation under the insurance and so enhance his access to bank financing.




Contracting

ADVICE

  1. The Spanish constructor discovers a business opportunity.
    As soon as your company identifies a potential contract for works abroad, contact CESCE to find out about the possibilities of coverage. You do not need to wait until the signature of the contract.
  2. The Spanish constructor requests coverage under the Construction and Works Abroad Policy.
    To request coverage fill in and e-mail the application form to cuentadelestado@cesce.es.
  3. Upon receipt of the application for coverage, CESCE contacts the Spanish constructor in order to facilitate access to Ecocheck, the online environmental questionnaire needed to complete the processing of the operation.

PROCESSING

  1. CESCE processes the application and answers the Spanish constructor.
    CESCE considers the application. If coverage of the transaction is accepted, CESCE issues a binding proposal undertaking to cover the operation in the terms approved. The insurance proposal will be valid during a specific period of time. In case coverage in the terms requested is not accepted, CESCE will inform the Spanish constructor of its decision in writing.
  2. The Spanish constructor signs the insurance proposal and forwards the documentation.
    The Spanish constructor returns CESCE the insurance proposal with his signature indicating acceptance, together with a copy of the works contract and the statement of compliance with the OECD Antibribery Convention.

DECISION

  1. CESCE sends the policy to the Spanish constructor.
    Immediately upon receipt of the insurance proposal valid and signed by the Spanish constructor, CESCE facilitates the insurance policy.
  2. The Spanish constructor signs and returns the policy to CESCE.
    Requisite for the conclusion of the insurance contract.
    The Spanish constructor returns CESCE the policy duly signed together with proof of premium payment.
  3. CESCE formalises the policy and sends a copy to the Spanish constructor.
    Requisite for the conclusion of the insurance contract.
    After due processing, CESCE signs the policy already signed by the insured and sends him his copy along with the premium receipt.



General Conditioning


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