Trade Credit Insurance

Trade credit insurance protects you from bad debts, one of the largest assets that your business carries.

Even the most disciplined credit management procedures cannot prevent a bad debt, any business that provides goods and services on a credit basis, have an exposure. This is where trade credit insurance may provide you/your business with a solution. Self-insurance can result in a substantial financial loss, whereas trade credit insurance puts the cash back into your business & your hands.

If you provide goods and services on credit terms, you are probably more likely to experience a credit default this year than you would a burglary or a fire.

When you agree to supply goods and/or services to your customers on credit, you place your business at risk of not receiving what you’re owed. If your customer cannot or doesn’t pay for the goods or services you’ve already provided, the impact to your business is immediate. Bad debt can be damaging to your balance sheet, profitability, your credit rating and ultimately your cash flow.

For most businesses, the money you’re owed is one of the largest assets and yet is often not considered when it comes to insuring against a loss. Businesses can protect their balance sheets and optimise working capital, whilst minimising the impact of a bad debt.

But what is a bad debt? A bad debt is a debt that cannot be recovered.

With Trade Credit insurance, you can protect your accounts receivable from losses due to credit risks such as insolvency or payment default and ensure that you do get paid for the goods and services that you supply.

One of the benefits of having a Trade Credit Insurance policy, aside from protecting your balance sheet, is that it creates a secure platform for developing trading relationships with existing and new business partners, giving you a competitive advantage and peace of mind in these tough economic times.