TRADE CREDIT INSURANCE
All forms of trade involve ‘Credit risk’. Are you prepared when your customers find themselves facing insolvency, defaulting on payments, act fraudulently or are unwilling to accept your goods on arrival?
Trade Credit insurance can help the effects of a major debtor’s insolvency or protracted default on a payment can be potentially devastating to any business and may:
- cause a reduction in profit; or
- result in considerable legal expense in recovering the amount owed or goods; or
- stress the cash flow of a business; or
- result in the collapse of your business.
Trade Credit insurance is designed to ensure that a company is not adversely or fatally affected by the unforeseen failure of a customer (or customers). Trade credit insurance is providing protection against:
- Financial loss in the case of bad debts arising out of insolvency (of your customers) or late payment;
- Financial hardship due to poor cash flow; and
- Costs and expenses associated with the recovery, or attempted recovery of trade debt.
Trade credit insurance may assist businesses in pursuing opportunities outside their comfort zone, such as:
- supplying to new industries or territories;
- forming new relationships with bigger clients;
- extending more credit to existing customers;
- pursuing sales opportunities on open account terms.
Buying trade credit insurance can give you the confidence you need to grow your business. This policy is an asset.
Trade credit insurance doesn’t normally cover fraud or contract disputes (unless resolved in the insured’s favour), though cover is available for contract repudiation.
Please contact us to discuss this specialised area of insurance and how we can help you and your company.