Overview

Selling your products and services on open credit terms can help you gain a competitive edge in the marketplace. However, it can also expose you to your customers’ financial difficulties. Consequently, your business incurs credit risk every time you extend credit to your customers. Although Accounts Receivables are typically a company’s most liquid and valuable assets they are also among the most unprotected assets. Trade credit insurance protects a company’s commercial accounts receivables from customers that are unwilling or unable to pay for products or services rendered due to insolvency, catastrophe, or political events.

Whether you sell within your town or around the world, credit insurance helps ensure that you will be paid for merchandise or services delivered to your customers. A trade credit insurance policy is a guarantee that you will be paid, subject to the terms and conditions of the policy, for the merchandise shipped or services rendered to your customers. By assuring payment, credit insurance can strengthen your company’s balance sheet and enhance your borrowing power, giving you the piece of mind to concentrate on growing your business.

TRADE CREDIT INSURANCE PROTECTS AGAINST:

  • Unforeseen credit loss(es) in accounts receivable
  • Insolvency (Chapter 7 or 11 or international equivalent)
  • Protracted Default (slow pay delinquency)
  • Political Risks (Government Moratorium, Contract Frustration, Discharge of Debt, War, Transfer, Public Buyer Default)

As a leading insurance brokerage, HUB International Northeast has strong relationships with all of the top rated Credit Insurance carriers. Our Trade Credit team leader, Michael Lee, has been working in the trade credit and political risk industry since 1997. Michael has an extensive knowledge of trade credit, structured finance and political risk products. Additionally, he has experience in providing expert advice to clients about other products and services, such as collections, trade financing options and credit risk analysis.

We understand that each business is unique. Our specialist will work with you and the insurance carrier to customize the policy to your particular needs. We will assist in establishing the structure that is consistent with your needs and requirements for protecting your domestic and export accounts receivable. With this protection in place, you can be assured that your accounts receivable sold on open credit terms will be paid by the trade credit insurer, within the terms and conditions of the policy, if your customer does not.

Related Coverages

FAQs

WHAT DOES TRADE CREDIT INSURANCE COVER?

Trade credit insurance covers the unpaid credit balance from merchandise shipped or services rendered to your customers in the event they cannot pay due to insolvency. Coverage for customers that are not insolvent, but who are past due or just slow in paying their invoices, may also be included in policies. Political risk exposure, such as currency inconvertibility and contract cancellation, may also be covered. Even unpaid credit balances resulting from natural disasters may be insured.

HOW DOES THE POLICY WORK?

Because each business is unique, a HUB specialist will work with you and the insurance carrier to customize a policy to your particular needs. As your business grows, HUB will work with you to adapt your policy accordingly. For example, you can add new customers, new export countries or simply make changes to existing coverage and terms.

WHY SHOULD I ENSURE MY RECEIVABLES?

Credit insurance can protect you against severe credit losses, which impacts your balance sheet and results in reduced working capital and an erosion of profits. Just as you ensure your property, your inventory and your employees, it is wise to insure all of your assets against severe loss. Account Receivables are one of your largest assets and insuring them allows you to:

Credit insurance can protect you against severe credit losses that impact your balance sheet and results in reduced working capital and an erosion of profits. Just as you insure your property, your inventory and your employees, it is wise to insure all of your assets against severe loss. Accounts Receivables are typically among your largest assets and insuring them allows you to:

  • Makes a company more efficient and improves the bottom line by providing expert advice.
  • Protects a company’s profits/ Reduces credit risk and improves financial planning.
  • Expands sales without increasing exposure by seeking out new customers or export countries.
  • Complements existing credit management practices.
  • Ensures continuity of business operations in the event of losses.
  • Helps policyholders negotiate better terms from banks.
  • Safely provide better credit terms to new or existing customers both in the US or abroad