Richard A. Moore | Financial and Insurance Advisor | Business Consultant
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Trade Credit Insurance


 What is Trade Credit Insurance

The first stop on the journey is to understand what Trade Credit Insurance is and what it is not.

Globally, Trade Credit Insurance supports nearly $3 Trillion in trade on open terms each year.

Trade Credit Insurance protects $600 billion+ in U.S. sales

Trade Credit Insurance enables a company to increase sales by up to 20%+

On average banks lend up to 80%+more on insured receivables.

Trade Credit Insurance-sometimes called accounts receivable insurance-is different from "insurance" in the traditional sense. It is a credit management tool that helps monitor, prepare, and protect your business from bad debt. It delivers world-class knowledge and data intelligence that empowers your sales decisions. Best of all, it is a guarantee of payment on you receivables.

Business of all sizes that choose Trade Credit Insurance benefit from accelerated safe sales expansion, elevated protection from bad debt, optimized credit management, and enhanced working capital.

As important as it is to know what Trade Credit Insurance is, it is equally important to understand what it is not. It goes beyond insuring receivables-it is a valuable, front end risk management partnership that supports all credit professionals.

It allows organizations to increase overall sales turnover, reduce credit risk, and improve profitability.

Trade Credit Insurance gives you the confidence to trade and get paid. It's an investment that protects you in the event of bad debt, and more importantly, helps you avoid bad debt in the first place. Trade Credit Insurance is predictive protection backed by data science that takes the guesswork out of your credit process, enabling you to safely grow your business.

When you purchase Trade Credit Insurance, your insurable customers' creditworthiness and financial stability are analyzed by the credit insurer. Then a specific credit limit is assigned to each of your customer accounts. This is the amount that will be indemnified if that insured fails to pay.

Credit insurers continuously monitor the creditworthiness of the companies they insure by analyzing key factors including debt, liquidity, and sector risk. As economic parameters change, credit limits may be adjusted as a normal part of the credit-monitoring process.

When signs indicate a company is experiencing financial difficulty, the credit insurer notifies all policyholders selling to that buyer about increased risk and establishes an action plan to mitigate and avoid loss. If an unforeseeable loss occurs, policyholders file a claim with supporting documentation. The insurer would pay the policyholder the claim benefit, typically within 60 days from the date of loss on domestic claims.

Unlike other types of business insurance, once a company purchases Trade Credit Insurance coverage, the policy does not get filed away until next year's renewal, the relationship becomes dynamic. A Trade Credit Insurance policy is consistently updated and optimized.

The ultimate goal of Trade Credit Insurance is not only to indemnify losses incurred from a default payment but also provide your business with support and knowledge needed to avoid foreseeable losses from the start.

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