Quick Start Guide to Trade Credit Insurance
Taking calculated risks is part and parcel of running a successful business.It means recognising an opportunity, acting quickly and being aware of what is at stake and taking steps to mitigate the risk. Unfortunately, there is one considerable commercial risk that many companies take for granted until it is too late.
Offering credit terms is essential to really compete and win new customers. However, it means that a company’s trade receivables – the money it is owed on account – could typically represent 35% of its balance sheet.
Credit insurance is a type of business insurance which covers losses arising from non-payment for goods or services. It means that should the worst happen - a customer’s insolvency or protracted default - the policyholder can protect their bottom line and maintain their cashflow.