Trade Credit Insurance
Trade Credit Insurance is a specialised policy designed to protect businesses against the risk of non-payment by customers. Whether you're selling goods or services on credit terms, this insurance ensures that your business is protected from the financial impact of customer insolvency, protracted default, or political risks that may prevent payment. Becks Insurance Brokers in Brighton offer tailored Trade Credit Insurance solutions, helping businesses secure their cash flow and continue growing confidently, even in uncertain economic times.
Protecting Your Business Against Customer Default
In business, extending credit to customers is often necessary to remain competitive. However, this practice carries inherent risks, particularly if customers fail to pay their invoices. Trade Credit Insurance mitigates these risks by covering the outstanding debt, ensuring that your business remains financially stable even when customers default. This insurance is particularly valuable for businesses that operate in volatile markets or that have significant exposure to a few key clients.
Features and Benefits
Accounts Receivable Protection: Safeguards your business against losses resulting from unpaid invoices, ensuring that your cash flow remains stable even if a customer fails to pay.
Comprehensive Risk Coverage: Protects against a range of risks, including customer insolvency, protracted default, and political risks that may prevent payment, such as government actions or currency restrictions.
Enhanced Credit Management: Provides access to credit management services, including credit checks and risk assessments, helping you make informed decisions about extending credit to new and existing customers.
Global Coverage: Protects your business against non-payment risks from both domestic and international customers, ensuring that your trade is secure no matter where your customers are located.
Debt Collection Support: Includes professional debt collection services to help recover outstanding payments, reducing the burden on your business.
Customisable Policies: Tailored coverage options that allow you to insure individual accounts, specific customer groups, or your entire portfolio, depending on your business needs.
Credit Limit Control: Enables you to set and adjust credit limits for each customer based on their financial health, reducing the risk of overexposure to any single client.
What is Typically Covered?
Trade Credit Insurance typically provides coverage for a wide range of risks associated with selling goods or services on credit terms. Typical cover might include:
Customer Insolvency: Protection against losses if a customer becomes insolvent and is unable to pay their outstanding invoices.
Protracted Default: Covers losses if a customer fails to pay within a specified period after the invoice due date, even if they are not insolvent.
Political Risks: Provides coverage for losses resulting from political events that prevent payment, such as wars, government actions, or currency restrictions.
Non-Delivery of Goods: Covers losses if goods are not delivered due to customer insolvency or other covered events after the shipment has been made.
Pre-Shipment Risks: Protection for costs incurred before the shipment of goods if a customer cancels an order or defaults on payment before delivery.
Contract Frustration: Covers losses if a contract is terminated due to circumstances beyond your control, such as political unrest or natural disasters.
Exclusions might include disputes over the quality of goods or services, customer dissatisfaction, or losses arising from contractual disagreements not covered by the policy. The specific terms and conditions will vary depending on your business’s needs and the insurer. Becks Insurance Brokers will work with you to tailor your Trade Credit Insurance policy, ensuring comprehensive protection that suits your trade activities.
To protect your business from the financial impact of customer non-payment, book an appointment with one of our specialists here or arrange a quotation here.
