Whole Turnover Insurance
Whole turnover insurance is a type of credit insurance based on all insurable sales.
This type of insurance is for business-to-business credit sales and will exclude any sales directly with local authorities, government departments, members of the public and cash and credit card sales.
The Benefits of Whole Turnover Insurance
With whole turnover insurance, your business is protected from bad debt. This means you are able to expand your business whilst maintaining your financial security.
The insurance company will help you to steer away from poor risks before you get involved. You will definitely be paid, if not by your customer, through your credit insurance policy.
Having whole turnover insurance with an A rated insurance company means you are more likely to secure increased funding at more competitive rates.
You can build stronger relationships with your customers as you are protected against trade losses, helping you to expand safely and securely in the UK and around the world.
What Type of Business Needs Whole Turnover Insurance?
If your business provides goods or services on credit, you need whole turnover insurance. Attempting to open new accounts, review payment terms whilst attempting to recover debts without insurance is extremely time consuming and complex. With insurance cover, you can expand safely without the concern that your business will suffer financially if another business collapses or fails to pay.
Whole Turnover Insurance Credit Limits
- Credit limits are set by the insurance company on major customers; they are subject to a review from time to time based on the latest available information.
- In terms of the whole turnover insurance policy administration, the insurance company will recommend an approved credit limit on principal customers whilst allowing credit limits up to a certain level to be set by following an agreed set of procedures.
- For companies turning over up to £5,000,000, it is normally appropriate for the insurance company to look at individual credit limits in excess of £10,000. For larger companies, this figure can be increased based on a number of factors including the quality of the credit control procedures when establishing credit limits for whole turnover credit insurance.
- The premium rate for whole turnover insurance is based on a combination of factors including trade sector, estimated turnover, previous bad debt experience, the strength of principal customers, terms of payment offered and general credit control procedures.
Find Out How Whole Turnover Insurance Can Help Your Business
To find out more information about how whole turnover credit insurance could benefit your company, contact us today for a strictly no cost or no obligation quotation.
FAQ’s
Whole turnover insurance is for business to business sales, with the exception of government departments, local authorities, cash and credit card sales. These policies will protect your business against the non-payment of goods or services as a result of insolvency and in most policies cover against very late payment, known as protracted default.
By using us as your specialist credit insurance broker for your whole turnover insurance we will use our knowledge, experience and buying power to negotiate the best possible terms for your business from a panel of the major credit insurance companies, including Atradius, Coface, Euler Hermes/Allianz Trade, Tokio Marine HCC & QBE Europe.
As a specialist whole turnover insurance broker we are not tied to a particular insurer but offer impartial advice on a range of different policies. You will never be on the phone for hours waiting to get through to a new customer service advisor that you need to explain your situation to again, you will get straight through to your broker who knows you, understands your business and will be able to provide independent and expert advice straight away. Without a specialist broker, you simply won’t find the same level of service.
If your business is ever facing a potentially catastrophic claim then as specialist whole turnover broker we will manage the process for you to ensure the best possible outcome in the shortest possible time. The key is understanding what is required and then first class presentation to get the submission of all of the required information right the first time.
The premium costs of whole turnover insurance will vary considerably based on the above factors, however broadly speaking, rates vary between 0.2% and 0.9% of insurable turnover. Most of the larger credit insurance companies have a minimum annual premium of around £4,000-£5,000. A typical premium rate for a £5,000,000 turnover business in a strong trade sector and with a good bad debt record would be in the 0.20%-0.40% region.
As an additional service to the above, most companies will extend whole turnover insurance cover to incorporate legal and collections costs that are incurred in recovering insured debts. This can be extremely valuable, especially if there is a need to issue winding up proceedings against a defaulting company, or if an overdue debt occurs with an overseas customer.
Policy excess for whole turnover insurance varies depending on previous bad debt and claims record. A higher excess can be used in order to achieve a premium saving and the insured percentage on whole turnover insurance claims is normally 90%. Claims are payable due to any type of insolvency and settlement can be made on debts that are agreed to be uncollectible with the possibility of an extension, to cover losses due to political risks on export business.