The coverage of losses from currency fluctuations in credit insurance depends on the specific policy and insurer. Here’s a breakdown of possible scenarios:

1. Indirect Coverage:

• Standard Policies: Most commonly, credit insurance offers indirect protection against currency fluctuations. If the buyer becomes insolvent or defaults due to adverse changes in currency exchange rates, the resulting financial loss could be covered.
• Focus on Ultimate Loss: The insurer focuses on the non-payment itself, rather than the underlying cause leading to the loss.

1. Specialized Coverage:

• Separate Policies: Some insurers offer separate foreign exchange risk insurance policies specifically designed to cover losses from currency fluctuations.
• Policy Add-ons: Certain credit insurers might offer optional riders or add-ons to provide some level of direct currency fluctuation coverage.

1. Factors to Consider:

• Currency of Invoice: If the invoice is in your domestic currency, currency risk is minimized. If invoiced in the buyer’s currency, your exposure increases.
• Coverage Type: Domestic credit insurance is less likely to include direct protection against currency fluctuations compared to export credit insurance.
• Policy Specifics: Always meticulously review your policy terms and any currency-related clauses or exclusions.

How to Manage Currency Fluctuations:

• Currency Hedging: Utilize financial instruments like forward contracts or options to lock in exchange rates and mitigate currency risk.
• Invoicing in Your Currency: If possible, shift the currency risk to the buyer by invoicing in your domestic currency.
• Diversify Markets: Selling to countries with stable currencies reduces your overall exposure to currency fluctuations.

Important Note: It’s crucial to discuss your specific currency risk concerns with your credit insurance broker or insurer to find the most suitable coverage options.