Trade credit insurance insures your company’s commercial accounts receivable against the risk of non-payment of goods or services from your buyers.
A very simple way of looking at it is that it is there to support your business growth by helping you choose the right trading partners and guaranteeing their invoice payments. The insurance covers non-payment as a result of insolvency of the buyer or non-payment after an agreed period after the due-date.
Customer non-payment events may occur when a customer becomes insolvent or does not pay within the contracted terms (a protracted default). The insurance reimburses you for the majority (typically 90%) of the debt owed to you.
Credit insurance is a risk management tool that can help protect from the devastating effects of loss caused by the insolvency or protracted default of your buyers.