Trade Credit Insurance (also known as Debtors Insurance) protects businesses from bad debts due to client insolvency and payments defaults.
For most businesses, the money you are owed, is one of the largest assets and yet it is often not insured. Even the most disciplined credit management cannot prevent bad debts and no matter how careful you are, your customers can sometimes fail to pay. What would be the impact of one of your largest customers failing to pay you?
Any business selling goods and services on credit terms with exposures to bad debts should strongly consider trade credit insurance as part of their business risk strategy. Self-insurance or a bad debt reserve does not replace monies lost, whereas trade credit insurance puts cash back in your hands.
There is no ‘one size fits all’ approach when it comes to Trade Credit Insurance and the level and cost of your policy will be dictated by your needs.