Trade Credit Insurance
Businesses of all sizes must continuously balance the cost of doing business with the risk of doing business. Accounts receivable, which typically represent more than 40% of a companys assets, are naturally a vital component of a healthy business. If a major customer is unable to pay its invoices, or if several customers are unable to pay their invoices, there will be a negative impact to cash flow, earnings and capital. In a worst-case scenario this could literally put a company out of business. These risks require thorough analysis.
Trade Credit Insurance is a business insurance product that provides this analysis but also indemnifies a seller against losses from non-payment of a commercial trade debt. With trade credit insurance in place, the seller/policyholder can be assured that non-disputed accounts receivable will be paid by either the debtor or the trade credit insurer within the terms and conditions of their policy.
Companies invest in trade credit insurance for a variety of reasons, including:
To further explore what Trade Credit Insurance can do for your company, the various insurance product available and costs involved please contact: