Non-Payment Protection for Sellers of Goods & Services
Companies use credit insurance to protect against the non-payment of domestic and foreign accounts receivable and other debt instruments.
A policyholder may choose to insure their entire portfolio, opt to cover a select group of accounts or even purchase coverage on a single customer.
Policies generally indemnify a seller for 95% of the payment obligation value. The maximum limit of liability for any single risk typically ranges from $50MM to $100MM per insurer.
Potential Policy Structures:
Short-Term Multi-Buyer Credit Insurance
Short-Term Key Account Credit Insurance
Short-Term Single Buyer Credit Insurance
Medium-Term Single Buyer Credit Insurance
Why Buy Credit Insurance?
Credit insurance offers benefits to policyholders in three key areas:
Offer more competitive sales terms to new and existing customers
Increase export sales by entering new foreign markets
Utilize “top-up” cover to increase existing credit limits for individual customers
Facilitates financing strategies regarding working capital and/or asset-based borrowing
Provides the collateral for creative financial solutions including:
- Non-recourse “off-balance sheet” financing through selling of accounts receivable
- Revenue recognition strategies
- Receivable securitization
Your company will receive indemnification from the Insurer for up to 95% of the debt owed to you if your customer goes bankrupt or fails to pay for an extended period of time.