Trade Credit

Trade Credit Insurance is a vital tool that businesses utilize to protect yourselves against the risks associated with providing goods or services on credit terms. This type of insurance covers you in the event that your buyers fail to pay their debts, whether due to insolvency, default, or other reasons. The coverages provided by Trade Credit Insurance typically include:

Non-payment coverage: This is the most basic coverage, reimbursing you for a portion of the outstanding debt when a buyer fails to pay.

Insolvency coverage: Protects you against the risk of your buyer becoming insolvent and being unable to pay their debts.

Protracted default coverage: Covers losses resulting from a prolonged delay in payment beyond the agreed-upon terms.

Political risk coverage: Protects against losses due to political events, such as war, civil unrest, or government actions that prevent payment from your buyer.

One key aspect of underwriting information for Trade Credit Insurance is the financial stability and creditworthiness of your customers. Underwriters analyze the credit history, payment behavior, and financial standing of your buyers to assess the likelihood of default or non-payment. This information helps underwriters determine appropriate credit limits for insured buyers and set premiums that reflect the level of risk involved.

Another important consideration in underwriting trade credit insurance is the industry and market conditions in which you operate. Underwriters examine the economic landscape, market trends, and competitive environment to assess your overall risk environment. Factors such as industry cyclicality, geopolitical risks, and the regulatory environment can all impact the likelihood of non-payment and influence the underwriting decision.

As an Insurance Advisory, we play a crucial role in assisting businesses in navigating the complexities of trade credit insurance. Here are some ways in which we can support our clients:

Risk assessment: We can help you identify potential risks in your credit transactions and assess the creditworthiness of your buyers to determine the level of coverage needed.

Negotiation: We can leverage our relationships with insurance providers to negotiate competitive premium rates and favorable policy terms on your behalf.

Claims assistance: We can assist with the claims process in the event of a claim, ensuring swift resolution and maximum reimbursement.

Ongoing support: We provide ongoing support and advice, helping you manage your credit risks effectively and stay informed about changes in the insurance market.