Also known as: Trade Credit Insurance Policy
Cover against non-payment by customers due to insolvency or protracted default.
Trade Credit Insurance protects against the risk that customers fail to pay for goods or services delivered on credit terms. For most businesses, receivables are the single largest current asset on the balance sheet and typically the only major one left uninsured. Beyond indemnity, credit insurers provide ongoing assessment of buyer creditworthiness, which functions as an early warning system on your own customer base.
Manufacturers, distributors, exporters and B2B service providers selling on credit terms. Particularly relevant where a small number of customers represent a large share of revenue, where credit terms are extended, or where entering new markets with unfamiliar counterparties.
Cover is structured through credit limits set per buyer, with an overall policy limit above. Indemnity is typically eighty to ninety percent of the insured debt, with the balance retained by the business to maintain aligned incentives on credit control. Premium is usually a percentage of insured turnover.
The difference between a policy that responds and one that disappoints usually sits in details that are easy to overlook at purchase.
Not sure which combination fits your business?
Speak to an AdviserCover applies to buyers for whom the insurer approves a credit limit. Buyers declined by the insurer are usually excluded — which is itself useful information about that customer.
Non-payment continuing beyond a defined period after due date, commonly ninety to one hundred and eighty days, without formal insolvency. It is the most frequent claim trigger.
Not while disputed. Cover typically responds once the dispute is resolved in your favour, which makes clean documentation important.
Yes. Export credit cover, often including political risk, is one of the main uses — particularly when entering unfamiliar markets.
Frequently. Lenders often extend better terms against insured receivables, and some working capital facilities are structured around credit-insured debtor books.
Typically a percentage of insured turnover, varying with sector, buyer quality, spread of risk and claims history.