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If you leave out important information in your proposal it can result in a claim rejection. Important information could be the fact that you have a history of payment defaults, a debtor has threatened non-payment or that you have debtors that are not declared in the proposal.
A common reason for claim rejection is late filing of a claim after the maximum reporting time provided for in the insurance contract. The reason for claim rejection in cases of late filing is that late filing significantly reduces the insurer’s ability to recover the funds from your creditor. Insurers price trade credit with the expectation that they will use legal and other recourse to recover at least a part of the default payment.
Many claim gets rejected because they lie outside the policy terms. Terms include the definition of goods, territory and payment conditions. Certain kinds of debtors such as government departments may be excluded in the insurance.