Trade Credit Insurance
What is Trade Credit Insurance?
Trade Credit Insurance, sometimes called Accounts Receivable Insurance, is a method of protecting a company’s accounts receivable against the risk that one or more key customers will fail to pay for goods and services. This type of insurance covers the risk of unpaid invoices that may arise as a result of protracted default, insolvency or bankruptcy of a customer (also known as a buyer). Trade credit insurance protects your cash flow and covers your business with your customers so that when they fail to pay you or go under, your company still gets paid.
Read Our Guide to Trade Credit Insurance
On Average, Banks Lend Up to 80% More On Insured Receivables*
Benefits of Trade Credit Insurance:
Cash Flow Protection – Buyer nonpayment, due to insolvency or slow pay, can have a significant negative impact on a company’s cash flow. Trade credit insurance allows a company to mitigate the financial impact of buyer nonpayment by transferring credit risk to a well-capitalized insurance company. Learn More
Increased Competitiveness – Secured or restrictive terms of sale can be a competitive disadvantage in trading relationships. Internationally, the working capital requirements of a commercial letter of credit can limit or preclude sales opportunity. Trade credit insurance allows a company to offer open account terms to international buyers, while reducing credit risk, which provides a distinct advantage when competing globally. Domestically, trade credit insurance allows companies to offer longer or extended terms to buyers. Learn More
Sales Growth – Often, buyers want to trade beyond pre-established credit limits. Trade credit insurance allows companies to expand sales without incremental credit risk by adding coverage to existing credit lines.
Monetize Accounts Receivable / Increase Working Capital – Accounts receivable represent the primary source of repayment for a working capital credit facility. Trade credit insurance enhances the receivable being financed thereby allowing a company to obtain expanded credit facilities, better advance rates, and improved terms through the reduction/elimination of ineligibles (concentrations, cross aged, foreign a/r).
As an insurance broker rather than an insurance agent, Securitas Global Risk Solutions is able to apply to multiple carriers to find the best contract, with the most coverage, for the least cost.
A carrier’s agent can only advise you as to that carrier’s specific contract. We have a team of experts who are available to you 24/7 to answer any questions or concerns. Additionally, our service comes at no charge to you.
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