Stay in control with Trade Credit insurance

Why buy Trade Credit insurance now?

Good cash flow and stability is vital to the smooth running of any business.  In these uncertain times it is more challenging than ever to achieve, so it’s a huge advantage to be able to have something in place that puts you back in control.

Here are some of the ways that Trade Credit insurance can help with that...

A health check on your customers

Trade Credit insurance is more than just financial protection. One of the most valuable services provided by Trade Credit insurers comes from the information that they hold on businesses, both in the UK and abroad.

This means that when you request cover from them for one of your customers, or someone you are planning to do business with, you have the benefit of their inside knowledge of that customer, ongoing credit monitoring and advance warning if the customer is in financial difficulty.

This can help decision-making on credit limits, avoid clashes between sales and credit control, and form part of your customer due diligence process.

If customers can’t pay?

Trade Credit insurance is a safety net, a back-up plan. If a customer can’t pay due to insolvency, then the Trade Credit policy will.

If customers won’t pay?

What if a customer isn’t bankrupt but simply won’t pay your bill?  There is no contract dispute; the accounts department just won’t pay up.

There has been a steep rise in the number of claims for this type of scenario under Trade Credit policies.

The main advantages are that the insurer will pay 90% of the invoice and then pursue the customer for the debt, which can work wonders for cashflow and remove the stress attached to aged debtors. If the full gross debt is recovered, the insurer will pass this onto you.

And finally,

What’s more, the Government is lending some additional protection to credit insurers until June 2021 to enable them to continue to provide cover to their clients during these challenging times. This facility means that a credit insurer can provide cover based on a buyer’s pre-pandemic trading position; the Government will provide protection to credit insurers in relation to shortfalls that are due to the pandemic.

If you’d like to know more about Trade Credit insurance, contact our specialist Trade Credit team on 0121 452 8707.