Insurance in trade and commodity finance transactions

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This Overview is a guide to the Banking & Finance content within the ‘Insurance in trade and commodity finance transactions’ subtopic, with links to the appropriate materials.

The term 'trade finance' (or ‘trade and commodity finance’) is used to cover a number of different forms of financing and methods of payment, from secured syndicated financings to letters of credit. Broadly speaking, trade finance is used by buyers and sellers of goods internationally to provide credit support for the different stages of the sourcing, production and sale of commodities.

Insurance in trade and commodity finance transactions

Insurance plays an important role in trade and commodity finance transactions. While many of the risks inherent in financing trade can be mitigated through effective structuring, including taking security where necessary, insurance provides an additional layer of protection for a financier. For example, security taken over goods that have been financed will be worthless to a financier if some of those goods are damaged or destroyed. Taking out...

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