Trade Credit Insurance

Trade Credit Insurance

Protecting your Debtors

Business Insurance Specialists Pty Ltd can assist you with your Trade Credit Insurance needs. Trade Credit insurance is designed, in the simplest terms, to protect you from bad debt resulting from your client’s insolvency.

If your business revolves around the sale of goods or services, and if you allow other business customers or clients to pay for those goods or services on credit, then there is a risk of non-payment and hence a trade credit insurance policy should be considered for your business.

If you operate a business, you invariably will need offer credit terms in order to compete in the marketplace. Your accounts receivable may end up with a long list of debtors.

Instead of payments for goods and services going directly into your business accounts if you have cash terms, the promised payment is stuck in accounts receivable until your debtors finalise payments.

As a result, if one of your debtors goes into insolvency or protracted default, your business can end up in a very difficult and precarious financial situation.

With access to all the major insurers that participate in this area of coverage, we assist you in obtaining the right Trade Credit (also called Debtors Insurance) policy.

Trade Credit insurance protects you by ensuring you:

  • Make sure your profit will be preserved in the event of major bad debts.
  • Provide your business with piece of mind, knowing that your largest exposures are covered in the event of a catastrophe.
  • Protect your cash flow liquidity and places cash back into the business.
  • Allows you to continue to grow your business if insolvency occurs to one of your client buyers.
  • Your credit management information will be strengthened.
  • You may be able to increase your credit limits safe in the knowledge you have insurance protection.
  • Provide you with a far larger bad debt reserve than you would otherwise carry.
  • Give you more security to offer the bank.

Political Risk

This type of insurance is a less well-known type of Trade Credit insurance but is occasionally requested.

Political risk insurance provides coverage against losses that can result from various political perils due to international trade including:

  • Confiscation, expropriation and nationalisation
  • Currency inconvertibility and non-transfer
  • Political violence, and
  • Contract frustration

To assist, if you can initially provide the following information at the initial time of contacting us, we can commence obtaining terms for your insurance.

  • Name of Financier
  • Confirmation the MOF guarantee is available
  • Confirmation of the security position of the Financier
  • Details of physical asset
  • Confirmation of tenor

Related Services

Due to the nature of Trade Credit, you may require access to additional information that may assist you in your debtor servicing.

These services range from commercial collection services, PPSR registrations, and a coverage gap solution that allows you to easily upload your debtors and compare your current approved and insured credit limit with your current debtors.

For a no obligation quote for your Trade Credit insurance needs, please complete the form below or contact Business Insurance Specialists today.