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Trade Credit Insurance

Why do you need to consider trade credit insurance?

You wouldn’t hesitate to insure your business property and stock. But often Trade Debtors are one of your largest assets - have you considered what would happen to your business if one or more of your key customers default on their payments?

A record £1 million was paid out every day during the second quarter of 2018 to help firms cope with the non-payment of bad debts1. Trade credit insurers paid £92 million to help UK domestic firms cope with bad debts. This is the highest quarterly figure since the ABI started collecting this data in 2007.   Our internal Trade Credit Claims team saw a 38% rise in credit insurance claims in 2018 from the previous year – numbers of claims are similar in 2019.

  • Protect your business from debt
    Bad debts can put your financial future at risk. Trade credit insurance provides assurance that lack of payment from a large customer won’t mean disaster for you.
  • Rate your customers for credit
    The insurer will assess the creditworthiness of your customers and set each of them a specific credit limit, which is monitored regularly.
  • Save time
    We research the right solutions for your requirements, saving you time and effort to concentrate on what you do best – running your business.

How our trade credit insurance experts can help

Our team can provide expert guidance to find a solution that best suits your requirements and business objectives.

1. https://www.abi.org.uk/news/news-articles/2018/09/the-carillion-effect-trade-credit-insurers-pay-out-a-record-1-million-a-day-to-help-uk-firms-stay-afloat/

Trade credit insurance covers more than just bad debts

Trade credit insurance doesn’t just protect your business against bad debts. It can also help you:

  • Grow by selling to new customers 
  • Explore new markets for export business 
  • Avoid losses in the first place, helping your business grow safely.
  • Offer more competitive terms to your customers.
  • Help you collect trade debts owed to you by your customers.
     

Frequently asked questions

Q
What is trade credit insurance?
A

Trade credit insurance helps a business to make decisions on new opportunities, expanding with new and existing customers or into new markets altogether, as well as helping to ensure payment is received from customers. Ultimately, a trade credit insurance policy will pay a business where its insured customers become insolvent or unable to pay

Trade credit insurance is used by large and small businesses as a Credit Risk Management tool. 

Q
What is credit risk management?
A

Credit risk management is how a business manages the amount of credit it grants to its customers, to enable it to trade and grow successfully. It is also how a business ensures it is paid by its customers in a timely fashion and how it manages customers who pay late or don’t pay at all.

The aim of credit risk management is to maximise sales whilst ensuring that payment is received for the transactions made.