Understanding Trade Credit Insurance

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Trade credit insurance – also sometimes called accounts receivable insurance – has one simple aim: to support your business when a customer fails to pay a trade debt.  

That situation may occur when a customer becomes insolvent or does not pay within the contracted terms (a protracted default).  The insurance indemnifies a proportion (up to 95%) of the debt owed to you.  You must have traded within the limit we give you for that customer.  Find out more about limits here.

The premium is calculated for your business and the way you trade. This helps us make sure you receive the best match and service excellence for your business as well as an affordable premium.

If you haven’t used it before, here’s how to work out what it might cost for one of our more popular policy types.  The premium is based on a percentage of your sales, conservatively around 0.25% - often below, sometimes above.  Suppose your sales were $20 million last year and you want to cover that entire revenue.  Then the premium would usually be less than $50,000.  

Remember that premiums can change depending on multiple variables.  They are affected by the losses you have experienced in the past, the customers you deal with and the sector you work in. Covering political risk as well as trade risk costs more. We calculate the best price for your situation so that these factors and your needs are taken into account.

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