Trade Credit Insurance
A trade credit insurance policy will provide your business with vital protection against non-payment for either goods or services due to the failure of a customer to pay their bills. A claim arises when a customer becomes insolvent or fails to pay within an agreed period of time. A trade credit insurance policy can cover straightforward goods sold and delivered, and also other commercial risks such as work in progress, so you can expand your business with confidence.
What Trade Credit Insurance Can Do For Your Business
Trade credit insurance will help to minimise bad debts and allow your company to expand sales safely in the knowledge that you will definitely be paid. By identifying exactly which of your current and potential customers are sound credit risks, you can concentrate your sales effort on customers who offer the best prospects for growth and profitability.
Why Use A Broker For Your Trade Credit Insurance?
- Working with a trade credit insurance broker will mean you access expert and personal advice to find the optimal cover for your business, whether that be for domestic trade, export trade, international trade or single account trade.
- There are many different types of trade credit insurance depending on the type of trade, from domestic and export credit insurance to catastrophe cover and international trade credit insurance. Working with a broker can help you to find the most effective cover possible for your business.
- We have over 30 years of industry experience, positioning us to provide the most cost efficient and highly personal service.
- If you ever have any issues or need to claim, you will be dealing directly with our small team of experts who know every necessary detail about your business and policy. You won’t be speaking to numerous customer service advisors and having to repeatedly explain your situation, as everything will be managed by us.
Trade Credit Insurance For Your Largest Assets
For most companies, over 40% of current assets are made up of money owed for goods and services provided on credit terms. Most companies insure all their other assets from buildings and stock to key personnel. However, if the largest single asset is uninsured, then a disastrous loss could be just around the corner. Statistically, you are much more likely to incur a large bad debt than to see your office or factory burn down, which is why trade credit insurance is so important.
All My Customers are ‘Blue Chip’, Do I Need Trade Credit Insurance?
Most companies think their major customers present an undoubted credit risk. Virtually every insolvent company was someone’s solid gold customer, but often the owners are either too close or can not see the risks they are taking. There is a long list of very high profile failures and near misses over the last few years, from long established banks to large quoted companies.
We regularly come across companies claiming that their customers are too big to fail and therefore don’t believe they need trade credit insurance. However, in recent times we have seen the collapse of:
- Debenhams
- Arcadia
- Bargain Booze
- Carillion
- Interserve
- Thomas Cook
- House of Fraser
- Patisserie Valerie
- Toys R Us
- Meridian Metal Trading
- British Steel
- John Parker & Sons
- NMCN Plc
It is not just the failure of these companies that has an impact, but the shock wave effect through the supply chain on an ongoing basis. We see the knock on effect of a large failure for many months after the failure and it might well make you wonder just how secure your customer’s outstanding debtor book really is. Investing in trade credit insurance is the most effective way to make sure that your business is protected, even if you believe your customers won’t be a credit risk.
Find Out More About Trade Credit Insurance
If you would like to find out how trade credit insurance could benefit your company please do not hesitate to contact us. All of our quotations for trade credit insurance are provided on a strictly no cost or obligation basis.
Trade credit insurance provides vital protection for businesses against the non-payment of goods or services, when a customer fails to pay what they owe. This is often as a result of a business becoming insolvent. If a business wants to expand or provide a service without financial risk, trade credit insurance can provide the cover to do so. There are many different types of trade credit insurance depending on the type of trade, from domestic and export credit insurance to catastrophe and international trade credit insurance.
The main benefit, and the reason why businesses invest in trade credit insurance, is to protect them from avoidable debt. The financial risk associated with expansion, international trade or domestic trade is minimised, helping businesses to expand confidently with financial security.
Trade credit insurance can also translate into increased funding for your business, as it positions you to make more competitive banking negotiations. Insurance claims are seen as guaranteed collateral to banks, so you are likely to be able to borrow more money to help your business to expand.
Additionally, you are in a position as a business to build stronger relationships with customers. As you are protected against trade losses, you can offer potential customers more appealing agreements. This could significantly expand your customer pool and allow you to offer more attractive incentives, pushing you ahead of competitors in saturated markets.
There are different types of trade credit insurance, to provide the most accurate cover for your specific business and industry. These include:
• Specific Account Insurance - trade credit insurance that provides cover against a particular company or group of companies that you are financially vulnerable to. • Export Credit Insurance - protects a business against any losses incurred during foreign trade. • Domestic Credit Insurance - protects your business against losses incurred through national trade. • International Trade Credit Insurance - enables international expansion by mitigating the majority of financial risks. • Whole Turnover Insurance - trade credit insurance that provides cover for the majority of a company’s turnover. • Catastrophe Credit Insurance - protects a business from exceptional financial losses, with a fixed annual premium.
A trade credit insurance broker is positioned to use their industry expertise to negotiate the best terms for your business and it’s specific needs. If the circumstances of your business are complex, working with a trade credit insurance broker will ensure that you find the right cover at the best possible price.
As well as establishing the best terms, if a claim needs to be made, it will be fully dealt with by the trade credit insurance broker. Any contact with claims departments will be completely out of your hands, helping you to focus on your business.
At Paul Humphreys Credit Insurance, we have over 30 years of experience providing an exceptional level of service as a trade credit insurance broker. We get to know our clients to thoroughly understand their business, and when this is combined with our expertise, we consistently find the optimal trade credit insurance for each and every client, at the right price.
Any business that sells goods or a service on credit needs trade credit insurance. Trying to recover uninsured debts, both domestically and internationally, can be extremely complicated and time consuming. So, trade credit insurance helps to mitigate the financial risks associated with trade on credit. Even if you work with companies that you are sure will not be a credit risk, the collapse of major companies is evidence that nothing is guaranteed.
Trade credit insurance helps you to move forward with positive business partnerships or to expand your business safely, without being held back by the financial risks. Overall, any business that will be impacted if a customer fails to pay an invoice needs credit insurance.
If you are unsure whether trade credit insurance is right for your business, contact us today and our team would be more than happy to talk you through your options.