Trade Credit Insurance

The Insurance Every Plant & Equipment Needs to Know About

Brief Summary: Trade Credit Insurance protects businesses against the risk of non-payment by their customers, ensuring that the company's cash flow and balance sheet are safeguarded against defaults. This type of insurance is particularly valuable for companies that offer credit terms to their customers, as it ... mitigates the risk of financial loss from unpaid invoices due to insolvency, protracted default, or political risks in cross-border trade.

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What is Typically Covered:

• Commercial Risks: Protection against customer insolvency or prolonged default in payment.

• Political Risks: Coverage for losses arising from political events that prevent payment, such as currency inconvertibility, ... government actions, or war in the buyer's country.

• Product Risks: Coverage for the non-payment of goods and services delivered as per contract terms.

• Buyer Insolvency: Compensation for losses if a buyer becomes insolvent and is unable to pay for goods or services provided.

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What is Not Typically Covered:

• Disputed Debts: Debts that are not paid due to disputes over the goods or services provided are typically not covered unless the dispute is resolved in favor of the insured.

• Credit Sales to ... Associated Companies: Sales made to subsidiaries or associated companies are often excluded.

• Pre-Delivery Risks: Risks associated with the period before goods are delivered to the buyer, such as pre-shipment risks, are usually not covered.

• Known Risks: If the buyer was known to be in financial difficulty at the time the policy was taken out, any resulting losses may not be covered.