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Business insurance

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Trade credit insurance

Trade credit insurance covers your losses if a debtor doesn’t pay you. It gives you stability through assurance of payment.

Any company that sells goods or provides services on credit terms is at risk of non-payment. Even companies with the soundest credit control processes are vulnerable.

Trade credit insurance is a practical solution for business owners, and will mitigate your credit risk exposure.

Benefits of trade credit insurance

Trade credit insurance policies:

  • preserve profits and protect liquidity and cash flow
  • transfer the risk of non-payment to an S&P “A-” rated or above credit insurance underwriter
  • enables business growth
  • enhance the ability to offer competitive credit terms
  • provide flexible coverage
  • are tax deductible and available at competitive premiums
  • provide security to bankers and protect shareholders’ assets.

How trade credit insurance works

Trade credit insurance policies are generally flexible and allow a policyholder to cover all or part of their portfolio by choosing from:

  • a business’s entire debtor ledger
  • nominated debtors only
  • domestic customers only
  • overseas customers only.

Policies are usually written on a 12-month renewable basis but can be negotiated up to a 36-month tenure, covering goods and services delivered or dispatched to approved customers during the period. The policies cover you up to 90% of the amount owing, premiums are cost effective and a planned tax-deductible cost.

To learn more about credit insurance and protection for your business risks contact us today.

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