Trade Credit Insurance | Colony West
May 26, 2024

Trade Credit Insurance

Insurance/By carolyn/0 comments

YES – Insurance can help when customers don’t pay you


Some Businesses ARE getting their BILLS PAID –

During this worldwide pandemic event, those who purchased Trade Credit Insurance, also referred to as Receivables Insurance, are getting their invoices paid. Doesn’t matter how big you are, Trade Credit insurance protects your business from bad debts.


Businesses of All Size

It’s used by businesses of all sizes to protect both international and domestic trade. Businesses also use credit insurance to help them secure finance and working capital with banks, explore new markets with confidence and attract new customers with favorable credit terms.

It insures your accounts receivable and protects your business from unpaid invoices caused by customer bankruptcy, default, political risks, or other reasons agreed with your insurer.
It’s also known as debtor insurance, export credit insurance and accounts receivable insurance.

No matter how careful you are, your customers can sometimes fail to pay. Unless you demand payment up front or are covered by credit insurance, this makes you vulnerable to bad debt. Unfortunately not many businesses are aware of the existence of Trade Credit Insurance.

Credit insurance protects your cash flow. It covers your trade with your customers, so that you still get paid even if they go under or fail to pay you.

Trade credit insurance works by insuring you against your buyer failing to pay, so every invoice with that customer is covered for the insurance year up to the terms of your policy.


Trade Credit Insurance Benefits

In addition to providing much needed cash flow to late (yes, you can file and get paid right away on a receivable as soon as it’s one day old) your Trade Credit insurance carrier can act both as your credit clearing partner and collection department. Trade Credit can actually help conservative businesses with limited access to credit grow their business much faster by taking on more customers than their credit facilities may allow by passing on the receivable risk to their Trade Credit insurer.


Let’s Talk

To find out if Trade Credit should be a part of your insurance/finance/risk management portfolio, please contact your Colony West Advisor today.