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Your invoice is still unpaid? Your foreign debtor is experiencing payment difficulties? If a loss is looming, please do not hesitate to contact us as competent partners. It is important that you contact us in good time in order to guarantee a smooth cooperation in the processing of a claim. We will be pleased to advise you and discuss and agree the necessary steps with you.

If a loss is looming, the following basic rules should be adhered to:

  • Please report any risk-increasing circumstances (e.g. payment default, request for an extension of the repayment period as well as a deterioration of the financial status) immediately to us in writing. Please let us also know what measures you have already taken and/or intend to take to assert your claims.
  • If you intend to make further deliveries to the foreign debtor, you will need the prior consent of the Federal Government.
  • Please initiate all due and reasonable measures to avoid or mitigate a loss. In doing so, please act with sound judgement and due commercial care.

If you file a claim for indemnification, this will normally result in the suspension of cover. Therefore, you should check whether it is possible to agree a repayment plan (extension of the repayment period) with your foreign buyer. As a rule, such an agreement requires the approval of the Federal Government.

Preconditions for the filing of a claim for indemnification

If a loss does occur, you can file a claim for indemnification. The preconditions for filing a claim for indemnification are as follows:

  • Existing Coverage
  • Loss of the accounts receivable / collateral (if applicable)
  • Proof that a legally valid claim exists
  • Proof that an event of loss has occurred
  • Performance of the duties incumbent on the policyholder


When a claim is processed, a distinction is made between commercial and political losses

In the case of a commercial loss, the reason for the payment default lies with the buyer, for example, due to

  • events defined as insolvency, such as bankruptcy, a composition settlement in or out of court, unsuccessful judgement execution
  • protracted default for more than six months in connection with supplier credits or one month in connection with buyer credits, respectively

Once the indemnification has been paid, the claim passes to the Federal Government up to the indemnified amount. Notwithstanding, the exporter remains bound to continue enforcing the claim for payment in accordance with the instructions of the Federal Government even after the payment of the indemnification. Where prior agreement has been obtained, the Federal Government shares the legal costs incurred. We will be pleased to assist you with choosing the institutions to be retained for enforcing the claim for payment.

In the case of a political loss, the reason for the default lies with the country in which the foreign buyer is domiciled, for example,

  • general legislative or administrative acts (e.g. freezing of payments, payment moratorium, rescheduling agreements),
  • warlike events, insurrection or revolution in the buyer’s country
  • non-conversion, non-transfer

A political loss is deemed to have occurred if and when the Federal Government acknowledges that a political event caused the loss of receivables. In the case of warlike events, the Federal Government will often do that quite soon. However, in the majority of cases, the loss is caused by legislative or administrative measures. Then, it may take some time until a claim is acknowledged as political loss. In the meantime, the case is treated as a commercial loss.

The majority of claims resulting from political events of loss are settled under a rescheduling agreement between the Federal Republic of Germany and the debtor country. At the latest when a multinational rescheduling agreement is signed, a claim will be acknowledged as a political loss.

If you have any queries, please do not hesitate to contact our claims specialists so that your claim can be settled as soon as possible.


More detailed information

In the series “Hermes Cover Special” brochures containing more in-depth information on the indemnification procedure (PDF, 337 KB), on duties (PDF, 345 KB) and One-off indemnification - option for banks under buyer credit cover and untied loan guarantees (PDF, 340 KB) have been published. 


Dr. Ullrich Ehrenberg

Claims - Special cover, project finance and manufactoring risk cover

Nicola Kruse

Claims - Commercial Claims

Birgit Lauryn

Claims - Recovery

Folko Wohlang

Claims - Restructuring