Trade credit insurance – also sometimes called accounts receivable insurance – protects businesses when a customer fails to pay a trade debt.
This often occurs when a customer becomes insolvent or is unable to pay within the contracted terms (a protracted default). Credit insurance indemnifies a proportion (up to 95%) of the debt owed to you.
Additionally, trade credit insurance provides world-class knowledge and data to empower your trading decisions. This helps businesses that choose trade credit insurance to avoid more bad debts and safely expand sales to new and existing customers.
There are 4 main benefits when you utilize a Trade Credit Insurance Policy
Bad debt protection
-Prevent disruption to cash flow from slow payment, nonpayment, and insolvencies
-Reduce the risk of key account concentration levels
-Expand sales into riskier or new markets with favorable terms
-Grow with existing accounts and safely offer open terms to new accounts
Financing & working capital
-Borrow against insured receivables
-More capital at reduced rates – take full advantage of A/R reduction in bad debt reserves
Credit department efficiency
-Provide a structure and discipline for credit decision making
-Fast data-driven credit decisions on customers, prospects, industries, and countries