Trade Credit Insurance
Protects businesses against non-payment risk by customers due to insolvency, bankruptcy, or prolonged default.
Secure Your Receivables, Protect Your Business
Trade Credit Insurance protects businesses against the risk of non-payment by customers due to insolvency, bankruptcy, or prolonged default. It ensures that a company receives payment for goods or services sold on credit terms, reducing financial risks and enabling confident business growth.
Why Choose Trade Credit Insurance?
Protection Against Bad Debts
Safeguards from losses due to customer insolvency, bankruptcy, or payment defaults.
Improved Cash Flow Stability
Ensures timely payments and protects against unexpected losses for operational continuity.
Enables Business Growth
Extend credit to new or high-risk customers confidently, expanding market reach.
Access to Better Financing
Banks offer better loan terms and higher credit limits when receivables are insured.
Enhanced Credit Management
Insurers provide creditworthiness assessments and monitoring of buyers.
Global Market Expansion
Reduces risks when trading internationally with unfamiliar buyers.
Competitive Advantage
Offer attractive credit terms to customers while mitigating risks.
How Trade Credit Insurance Works
Policy Application
Submit details about your business, customers, and credit sales for risk evaluation.
Customer Assessment
Insurer conducts credit checks and assigns coverage limits for each customer.
Coverage Activation
Coverage begins for sales to listed customers with regular monitoring.
Default Scenario
If a customer defaults, notify insurer. After waiting period (90-180 days), claim begins.
Claim Settlement
Insurer pays 80-90% of outstanding amount after investigation and verification.
Who Needs Trade Credit Insurance?
Types of Coverage
Whole Turnover Policy
Covers all eligible customers and sales across entire portfolio.
Selective Coverage
Choose specific customers or markets for targeted risk management.
Export Credit Insurance
Specialized for international trade including political risk protection.
Domestic Trade Credit
Coverage for domestic sales focusing on commercial credit risks.
Single Transaction Cover
One-off coverage for large transactions or specific high-value deals.
Risks Covered
- Customer insolvency and bankruptcy
- Prolonged default (beyond agreed payment terms)
- Legal insolvency proceedings
- Political risks (for export coverage)
- Commercial credit risks
- Buyer's inability to pay due to financial difficulties
Common Exclusions
- Disputes over product quality or service delivery
- Warranty and guarantee claims
- Contractual disagreements unrelated to payment ability
- Pre-existing bad debts known at policy inception
- Fraudulent activities by the insured
- War, terrorism, and force majeure (unless covered)
Premium Factors
- Annual turnover and credit sales volume
- Industry sector and associated risks
- Geographic spread of customers
- Customer concentration and credit quality
- Payment terms and credit period offered
- Historical bad debt experience
Claim Process
Immediate Notification
Notify insurer when a customer fails to pay or shows financial distress.
Documentation Submission
Provide invoices, proof of delivery, payment reminders, and correspondence.
Waiting Period
Standard 90-180 days from due date before claim becomes payable.
Investigation
Insurer verifies the debt and confirms customer's inability to pay.
Settlement
Insurer pays covered percentage (80-90%) of outstanding invoice amount.
Tips for Effective Credit Management
Conduct thorough credit checks on customers before extending credit terms
Maintain accurate records of all transactions, communications, and payment history
Set reasonable payment terms and monitor customer payment patterns regularly
Diversify customer base to reduce concentration risk
Implement early warning systems to identify potential payment issues
Review and update customer credit limits regularly based on financial status
Understand political and economic risks when dealing with international customers
Frequently Asked Questions
Other Financial Lines Products
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