Exchequer Risk Management
No.3 Siskin Drive, Coventry, CV3 4FJ
Opening Hours: 8:30am - 05:30pm

Trade Credit Insurance

Trade credit insurance covers businesses should customers who owe money for your products or services.

01

Trade Credit

Trade credit insurance is primarily for products/services due within 12 months, where businesses can have it for their entire portfolio of customers or individual accounts.

02

Protection

With trade credit insurance, the policyholder can know that their business is protected against both commercial and political risks that are beyond their control knowing that money owed to them will be paid.

03

Reliability

Trade credit insurance can help your business to grow profitably, supporting them at all stages of the business cycle and minimising the risk of unexpected customer insolvency.

What is trade credit insurance?

Trade credit insurance provides cover for businesses if customers who owe money for products or services do not pay their debts, or pay them later than the payment terms dictate. It gives businesses the confidence to extend credit to new customers and improves access to funding, often at more competitive rates.

Trade credit insurance is primarily for products and services that are due within 12 months, and businesses can buy trade credit insurance for their entire portfolio of customers or individual accounts.

With trade credit insurance, the policyholder can know that their business is protected against both commercial and political risks that are beyond their control knowing that money owed to them will be paid. It can help your business to grow profitably, supporting them at all stages of the business cycle and minimising the risk of unexpected customer insolvency.

What does trade credit insurance cover?

Our trade credit insurance policies generally offer two types of risks that a business can include in their cover:

  • Commercial risk- the risk that your customers are unable to pay the outstanding invoices because of financial reasons, for example, declared insolvency or protracted default.
  • Political risk- non-payment as a result of events outside the policyholder or customer’s control, for example, due to political events (wars, revolutions); disasters, (earthquakes, hurricanes); or economic difficulties, such as a currency shortage so are unable to transfer money owed from one country to another.
icon Do I need trade credit insurance?

Trade credit insurance can be helpful for any business of any size that sells goods or services on credit terms to other companies, no matter the industry or type of goods or service being traded.

It’s particularly popular among companies with long payment terms, such as businesses in construction and retail, where invoices may not be due for up to six months. If the threat of a non-paying customer could strain your cash flow or even threaten to buckle your business, then trade credit insurance is something to consider.

Any company trading with customers that are based in other countries may also want to consider trade credit insurance. Trading abroad carries additional risks when compared with domestic trade. Customs can slow the transaction of money or introduce delays in the supply chain. It’s also more difficult to assess the financial stability of clients based overseas or predict instances that could result in delayed payment. These risks can be absorbed by political risk cover, sometimes specifically referred to as export credit insurance, as the insurer can typically pay out for any outstanding invoices from foreign clients.

For more information, talk to our team of Experts

Do I need Trade Credit Insurance?

Trade credit insurance can be helpful for any business of any size that sells goods or services on credit terms to other companies, no matter the industry or type of goods or service being traded.
See below for more detail on why Trade Credit Insurance can further benefit your business:

Prevent cash flow setbacks

If the threat of a non-paying customer could strain your cash flow or even threaten to buckle your business, then trade credit insurance is definitely important to consider.

This type of insurance is particularly popular among companies with long payment terms, such as businesses in construction and retail, where invoices may not be due for up to six months.

Any company trading with customers that are based in other countries may also want to consider trade credit insurance. Trading abroad carries additional risks when compared with domestic trade. Customs can slow the transaction of money or introduce delays in the supply chain. Therefore, its more difficult to assess the financial stability of clients based overseas or predict instances that could result in delayed payment.

Types of trade credit insurance products

We aim to research and tailor a trade credit insurance policy that meets the specific needs of your business. Our popular policy types include:

Whole Turnover

This type of policy covers all of your accounts receivable, either worldwide or in a specific geographical region.

This type of policy covers one or more of your key customers, giving you the confidence to expand your business with them.

A policy that extends the limit of a trade credit insurance policy you may have with another provider, giving you additional peace of mind when growing your business.

Sometimes also called “catastrophe policy”, this covers you for exceptional losses over and above normal levels of bad debt.

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