Protect your business from customer insolvency and non-payment
In today’s competitive market, extending credit to customers is often essential to maintaining sales and relationships. But when customers fail to pay due to insolvency, default, or delayed payments, it can create serious cash flow challenges, even threatening your business’s survival.
Trade Credit Insurance safeguards your business by protecting your accounts receivable. It ensures you get paid for the goods and services you provide, even if your customer cannot pay.
Why Trade Credit Insurance matters
A single unpaid invoice can have a significant impact on your business. On a 10% profit margin, a bad debt of $100,000 would require an additional $1 million in new sales to recover the loss.
Trade Credit Insurance helps protect your business from these risks, allowing you to trade confidently, maintain liquidity, and plan for growth with certainty.
What does Trade Credit Insurance cover?
Trade Credit Insurance can protect your business against:
- Customer Insolvency - when a debtor becomes bankrupt, enters liquidation, or administration.
- Protracted Default - when payment is not received within a specified period, even if the customer remains solvent.
- Political Risks (for Exporters) - protection against losses caused by government action, political unrest, or trade restrictions.
- Collection Costs - assistance with recovering outstanding debts through professional collection services.
Policies can be tailored to cover either your entire debtor portfolio or specific high-risk customers, depending on your business needs.
Who needs Trade Credit Insurance?
Trade Credit Insurance is suitable for:
- Businesses offering goods or services on credit terms
- Exporters dealing with overseas buyers
- Wholesalers, manufacturers, and distributors managing large accounts receivable balances
- Businesses expanding into new markets or industries
How we support you
At Network Insurance House, we help businesses of all sizes protect their balance sheets from the impact of bad debts.
- We assess your customer credit exposures and identify areas of risk.
- We source appropriate cover from trusted trade credit insurers.
- We review and adapt your policy as your customer base or markets evolve.
- We act as your advocate at claim time, managing communication with the insurer to secure a fair and timely outcome.
Frequently Asked Questions
- What is Trade Credit Insurance?
Trade Credit Insurance protects your business from losses caused by customers who can’t or won’t pay their invoices. It covers situations such as insolvency, protracted default, or political risks affecting overseas buyers, helping maintain your cash flow and financial stability.
- Who needs Trade Credit Insurance?
Any business that sells goods or services on credit terms can benefit from Trade Credit Insurance. It’s particularly valuable for wholesalers, manufacturers, exporters, and distributors with large accounts receivable balances or exposure to a small number of key customers.
- Does Trade Credit Insurance cover overseas customers?
Yes. Exporters can extend their cover to include international buyers. Many policies also offer protection against political risks, such as government intervention, currency inconvertibility, or trade restrictions that prevent payment.
- Can I insure only specific customers or invoices?
Yes. Policies can be tailored to suit your needs – covering either your entire customer portfolio or selected high-value or high-risk accounts.
- What’s the difference between Trade Credit Insurance and Debtor Insurance?
The terms are often used interchangeably. Both types of insurance protect your receivables from customer non-payment, but Trade Credit Insurance generally provides broader protection, including political risk and collection assistance.
- How does Trade Credit Insurance support business growth?
By reducing the risk of unpaid debts, Trade Credit Insurance allows you to confidently extend credit to new customers and explore new markets. It can also strengthen relationships with lenders by demonstrating sound credit risk management.
- How can I arrange Trade Credit Insurance?
At Network Insurance House, we work with specialist insurers to design Trade Credit Insurance programs suited to your customer base, industry, and risk profile. Contact us (link to Contact Us page) to discuss a tailored solution for your business.
