3/8/2014 ECGC

Software Project Policy - (SPP)

Credit Insurance Policies
The Services Policies of the Corporation which have been in existence for some
time were offered to provide protection of exporters of services including software
and related services. However it was found that the general services policy does
not meet with the exact requirements of software exporters. It was therefore
decided to introduce a new credit insurance cover to meet the needs of the
software exporters, namely, software projects policy, where the payments will be
received in foreign exchange. The general services policies will continue to be
offered for the export of services other than software and related services.
What are the software services exports that will be eligible for cover under the Software Project Policy?
The following software services will be eligible for cover under the Software Projects Policy: Software
project services, either on one time/turnkey basis or progressive/milestone basis, involving

Development of software off-shore (i.e. at the exporters location in India) to be delivered and
implemented in the buyers (client) location; or
Development of software on-site of the client and supply and implementation; or both off-shore and
on-site development.

The risks covered under the policy :

a. Commercial Risks
I. Risks covered on the overseas buyers::
Insolvency of the buyer.
Failure of the buyer to make the payment due within a specified period,
normally four months from the due date.
Wrongful repudiation of the contract by the customer after the exporter has
incurred expenses for commencement of services.

b. Political Risks
Imposition of restriction by the Government of the customers country or any Government action,
which may block or delay the transfer of payment made by the customers.
War, civil war, revolution or civil disturbances in the customer's country.
The imposition in India or in the customers country after the date of contract ,of any law or of an
order , decree or regulation having the force of law , which in circumstances outside the control of
the exporter and /or the customer , prevents performance of the contract;
Or any of the following causes of loss beyond control of the exporters or the customers.

(a). Refusal of visa for the employees of exporter for reasons not attributable to exporter or buyer;
(b). Increase of in any tax /new levies payable by exporter in customers country which is not
recoverable from customer ;
(c). Imposition by a competent court of law or the government , a rule or law or an order which
results in losses / additional costs due to infringement of intellectual property rights(IPR) of a process or
software which was either in the domain of free software or the IPR was not established on the date of
contract; etc.
For a, b, c above the cover under the policy would be available to the maximum extent 25% of the value of
export.
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To download the proposal form for a Software Project Policy, click here.

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