To take control of your cash flow, consider the benefits of trade credit insurance. It’s an important business tool that helps you lower the risk for bad debts or unpaid accounts receivable. If you are curious about how much trade credit insurance costs, remember this: there are ways you can help control those costs and make a good trade credit insurance investment that helps you grow your business.
How Much Does Trade Credit Insurance Cost?
Trade Credit Insurance Cost and Policies
What does trade credit insurance cover?
Trade credit insurance protects businesses from non-payment of commercial debt. It covers your business-to-business accounts receivable. If you do not receive what you are owed due to a buyer’s bankruptcy, insolvency or other issue, or if payment is very late, a trade credit insurance policy will reimburse you for a majority of the outstanding debt. This helps you protect your capital, maintain your cash flow and secure your earnings while extending your competitive credit terms and helping you access more attractive financing.
With trade credit insurance, you can reliably manage the commercial and political risks of trade that are beyond your control. Trade credit insurance can help you feel secure in extending more credit to current customers or pursuing new, larger customers that would have otherwise seemed too risky.
You may decide to invest in trade credit insurance if you are looking to:
How much does trade credit insurance cost?
The cost of your trade credit insurance policy will vary depending on your industry, your annual revenue that needs to be insured, your history of bad debts, your current internal credit procedures and your customers’ creditworthiness, among other factors.
If you sell to clients in a mix of industries and countries, your rates will reflect the risk determined to be associated with all of them.
Your premium is based on a percentage of your sales, conservatively around 0.25 cents on the dollar. If your sales were $20 million last year and you want to cover that entire revenue, your premium would typically be less than $50,000.
A trade credit insurance policy can typically offset its own cost many times over, even if you never make a claim, by increasing your sales and profits without taking on additional risk.
Getting a trade credit insurance quote is the most accurate way to determine cost. There are many different policies designed to cover specific business needs.
Tell us about your customers, and we'll tell you about the trade risks... and opportunities.
Common factors influencing credit insurance cost & premiums
Remember, your trade insurance premium can change depending on multiple variables, including:
Trade credit insurance policies and features
Trade credit insurance is not “one size fits all.” The level of risk associated with your industry, customers and location will be unique to your business, so coverage solutions are tailored to your needs. Euler Hermes Trade Credit Solutions include:
Corporate Advantage Coverage Enhancements:
- EZ Cover: For Euler Hermes Corporate Advantage customers that need the ability to make quick coverage decisions on frequent, smaller accounts, we offer our EZ Cover service. Get accounts receivable coverage for any customer not named in your Euler Hermes policy with a straightforward endorsement and easy access through our online policy portal. EZ Cover can help you confidently take advantage of a sales opportunity and with instant feedback, tap into the reach of Euler Hermes’ database of more than 85 million U.S. and Canada-based companies’ existing grades.
Learn more about EZ Cover
- CAP Suite of Products: With a Euler Hermes Corporate Advantage policy, our underwriters will always provide the most appropriate coverage limits for your trading partners based on the information we have available. In cases where the standard coverage falls short of the requested amount on your riskier customers, you may have additional options with our CAP suite of products. Our CAP and CAP+ products allow customers to purchase additional limited coverage on higher risk buyers so that you can safely take advantage of important sales opportunities.
Learn more about our CAP products
When you need protection from large unexpected losses and assurance that the protection will not be withdrawn, grow safely and strategically with Non-Cancellable Insurance. With these solutions, Euler Hermes commits to insure transactional risk up to a limit, and that limit is good for your policy year, even if your credit risk rises.
Tell us about your customers, and we'll tell you about the trade risks... and opportunities.
Recommended Resources
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Get answers to common questions about credit insurance, claims and more.