How much does a trade credit
insurance cost?

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There are different types of trade credit insurance solutions depending on your needs as a company and cost varies in correlation to their specificity. Hence, a multinational company’s needs will be ultimately different from those of an SME for instance. Your business activity is also decisive. Do you occasionally have a very large order or rather several smaller orders with one customer? Do you deliver tailored services or, are you, impacted by seasonality? Turnover and risk diversification are important in determining the premium.

For certain types of credit insurance, such as our SME solution Simplicity , you pay a fixed premium, depending on your turnover. For most policies, the premium is calculated as a percentage of your turnover. In addition, you pay a limit fee for each limit you apply for. Usually the percentage is less than 0.5% of your company's turnover. The following factors determine the premium:
 

  • Turnover of your company;
  • Spread of the risk, as the number of debtors or the distribution over different countries for example;
  • The industry to which your company and customers belong;
  • Agreed delivery terms and payment terms;
  • The additional risk covered, such as political risk and contract or manufacturing risk;
  • Agreed percentage of cover in the credit insurance policy.

Uncollectible receivables and dubious trade debits on the balance sheet on average amount to about 0.7% of the total turnover. A credit insurance policy is therefore very cost-effective, on top of all the other benefits.

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Why choose Euler Hermes?

Experience

55,000+

clients worldwide
Knowledge

83 million

businesses monitored
Confidence

AA rating 

by Standard & Poor’s 
The risk of non-payment exists even when your customers are established businesses. Trade credit insurance covers the commercial and political risks that prevent payment of monies owed to you. Use our policies to reduce the impact of customer insolvency and mitigate non-payment risks . We monitor your customers’ financial health and grade them with our scoring system. You set trading limits to control the size and frequency of orders you will accept from new or existing customers. We monitor the grades constantly and inform you of changes based on the financial challenges your customers are facing. You can adjust your trading limits to manage the credit risk. Our debt collection services support your own processes and optimise payment rates. Your banking and commercial relationships can improve when you have trade credit insurance.