Accounts receivable are often a business’s largest asset. If your customers are unable to pay what they owe, potential credit losses can present a substantial threat to your business. Trade credit insurance—also known as credit insurance or export credit insurance—is a form of insurance that transfers risk for businesses seeking to protect their accounts receivable against nonpayment.
Trade credit insurance policies are created to suit your needs and offer a number of important benefits:

  •  Improved sales. Businesses with trade credit insurance can boost their sales by offering customers and prospects more favourable credit terms, while eliminating the need for costly letters of credit.

  • Access to new markets. Trade credit insurers offer protection against unique export risks by providing businesses with the market knowledge needed to make informed decisions in foreign markets.

  • Insolvency protection. In regards to sales made on credit terms, trade credit insurance protects organizations from the risk of a customer default or insolvency.

  • Cash flow relief. Trade credit insurance provides cash flow relief when a business’s customers become insolvent or do not pay their bills on time. Losses can be indemnified, allowing the business to maintain its cash flow.

  • Reduce concentration risk. Trade credit insurance mitigates risks for businesses whose bottom line is dependent on a select number of customers.

  • Accounts receivable support. Trade credit insurers offer businesses access to professional trade credit analysts who can share best practices with a company’s credit department.

  • Collection services. Trade credit insurance provides access to cost-effective collection services.

  • Facilitate bank financing. Banks will typically offer more favourable lending terms to businesses that insure their accounts receivable.

  • Portfolio monitoring. Trade credit insurance also provides access to professional portfolio monitors who track customers’ ability to meet their financial obligations to the insured business.