Protect a large and vital business asset. This policy pays you if a customer defaults on payment. In this way it ensures a steady cash flow and mitigates an important business risk.
Trade credit insurance covers default for several reasons ranging from political situations, currency demonetization, license cancellation or exchange rates fluctuations. Defaults by public sector units can also be insured.
Trade Credit Insurance protects defaults even if your customer goes bankrupt. The reason for bankruptcy is not relevant. This is particularly relevant for a fragmented customer base that is exposed to economic cycles.
By taking trade credit insurance policy, you will cover all the risk of default by your customers. This will ultimately keep your bad debt level low, which further helps grow the business. Remain focus on business’s core activities and don’t worry about payment defaults.
Trade Credit Insurance, an essential risk management tool for businesses operating in today's competitive global market. As international trade continues to grow, so do the potential risks associated with it. Trade Credit Insurance shields businesses from uncertainties linked to non-payment or insolvency by domestic or overseas buyers, offering protection. This insurance empowers companies to confidently expand sales, enhance cash flow, and mitigate bad debt risk by offering financial security.
Trade Credit Insurance shields businesses from risks tied to extending credit terms to customers, providing specialized protection for this purpose. When companies sell goods or services on credit, they face the risk of non-payment or delayed payment. This can impact cash flow and financial stability.
Trade Credit Insurance, also known as Credit Insurance, acts as a safety net. It mitigates these risks and ensures business run smoothly even if customers don't pay. Therefore, Trade credit insurance works by covering existing debts. It offers protection if customers become high-risk and default on payments.
Trade Credit Insurance policy covers a company's accounts against potential losses caused by customer insolvency. It also includes protection for protracted default and political risk in foreign trade. If a customer becomes insolvent, the insurance company compensates the insured business for the outstanding debt. This compensation is subject to the policy's coverage limit.
This safeguard enables businesses to protect their balance sheets, reduce bad debt provisions, and maintain a healthier cash flow.
Trade Credit Insurance is particularly valuable for businesses dealing with multiple customers. It's also crucial in volatile industries with a higher default risk. It allows companies to explore new markets and extend credit to customers they might have deemed too risky otherwise.
Trade Credit Insurance protects businesses that offer credit terms to their customers for the sale of goods and services. Here's how it works :
Trade Credit Insurance offers several significant benefits to businesses. It provides them with a robust safety net against potential risks associated with credit transactions. Let's delve into these advantages in detail:
Trade Credit Insurance extensively covers non-payment and delayed payment risks. It encompasses various eventualities that may affect a business's accounts receivable.The covered scenarios include:
Trade credit insurance primarily addresses commercial and political risks, particularly export credit risk, excluding coverage for credit unemployment or credit cards. It is one of the long-term risk management strategies, distinct from short-term solutions like credit unemployment insurance.
Trade Credit Insurance provides extensive coverage to protect businesses from various risks, but there are certain exclusions. The following situations are not covered by the policy:
The entitlement criteria for trade credit insurance depends on the insurance provider and policy. However, there are few things that you need to qualify for this insurance coverage. Here are the entitlement criteria of trade credit insurance. If you
Here are the key points of the Trade Credit Insurance claim process:
To file an insurance claim efficiently, the insured must submit the following essential documents:
Renewing a Trade Credit Insurance Policy online is a straightforward process. Here are the steps
Let's say you own a medium-sized textile manufacturing company that supplies fabrics to various garment retailers. A major fashion brand, a key client, orders a large quantity of premium fabrics but requests a 120-day credit period. While this is an excellent opportunity for your business, it also presents a considerable risk. Financial issues or bankruptcy of the fashion brand could cause substantial losses, affecting your operations and cash flow adversely.
To protect your business from such credit risks, you decide to purchase a Trade Credit Insurance Policy. Here's how it works:
Often called credit disability insurance, it offers lasting financial security, a crucial safeguard for borrowers in the long term.
The value of credit insurance limits varies for each customer. The insurer determines it based on assessing the customer's financial capability to fulfil their obligations. Trade credit insurance is a type of credit insurance that typically utilizes letter of credit arrangements and excludes credit life insurance.
We have specialized underwriters and tie-ups with international experts.
We work with all insurers to get you the best options- both in terms of price and features.
Cover notes are issued within hours of request. This ensures that your goods don’t sit idle at any stage.
We manage all aspects of your claim - from survey appointment to documentation to insurer follow-up.
We will advice you on risk management best practices
See all your contracts and renewal information in one place. Place service requests on PAM.