Selling to customers outside Canada can boost your revenue. It can also expose your business to a new risk: not getting paid. Export credit insurance, often called accounts receivable insurance, helps protect your cash flow when a foreign buyer delays payment or defaults altogether.
For many Canadian exporters, this type of insurance is the difference between taking on new international customers and turning them away.
Export credit insurance protects your accounts receivable when you sell goods or services on credit to foreign buyers. If a buyer fails to pay, the policy can reimburse a large portion of the unpaid invoice.
In Canada, one of the main providers is Export Development Canada (EDC) through its Accounts Receivable Insurance program.
According to EDC, this insurance is designed to protect Canadian businesses against non-payment due to:
Coverage depends on where your buyer is located and how risky they are as a customer.
EDC’s Accounts Receivable Insurance is available to:
EDC reviews each buyer and market before approving coverage.
EDC does not publish a fixed maximum dollar amount. Coverage limits are determined case-by-case, based on:
Applicants should consult EDC for specific coverage details. Pricing also varies. Premiums depend on buyer risk, markets served, and insured sales volume.
Unpaid invoices can quickly strain your working capital. Export credit insurance helps in two key ways:
Many Canadian lenders accept insured receivables as collateral. This can make it easier to secure operating lines of credit or export financing.
Tools like GrantHub’s eligibility matcher can help you filter export support programs by province and industry in seconds, including insurance and financing options tied to receivables.
Coverage is approved buyer by buyer. You must receive confirmation from EDC before shipping goods.
Insurance must be in place before a default occurs. Late applications will not be covered.
Some markets have restricted or limited coverage. Always confirm availability for each country.
Policies often require regular reporting of sales and overdue invoices. Missing these steps can affect claims.
Q: What is accounts receivable insurance?
It is insurance that protects your business if a customer does not pay an invoice. EDC’s version focuses on foreign buyers and export sales.
Q: Does EDC accounts receivable insurance cover all countries?
No. Coverage depends on where your buyer is located and how risky they are as a customer. EDC assesses each market individually.
Q: Can insured receivables help me get a bank loan?
Yes. Many lenders accept insured receivables as collateral, which can improve your access to working capital.
Q: How much does export credit insurance cost?
There is no flat rate. Pricing depends on buyer risk, markets, and sales volume.
Q: Are insurance payouts taxable?
Insurance proceeds may have tax implications. You should review this with your accountant.
If you are exploring international growth, you may also want to read:
Export credit insurance can reduce risk and support safer international growth, but it is only one piece of the export funding puzzle. GrantHub tracks hundreds of active grant and support programs across Canada, including export insurance, financing, and market development support. Checking which programs match your business profile can help you plan your next move with more confidence.
Was this article helpful?
Rate it so we can improve our content.
Canada Proactive Disclosure Data
The Canadian government has funded over 400,000 businesses through 1.27 million grants and contributions. Check your eligibility in 60 seconds.