Trade Credit and Political Risk

Expansion is the name of the game in today's domestic and global markets. Companies are looking to sell goods or services on credit terms both domestically and overseas, along with penetrating newly emerging markets where opportunities abound for exponential growth.

On the flip side, the risks are greater and deeper than ever before: non-payment due to a customer's insolvency, protracted default, political risks or acts of war that prevent contract performance and failure to perform obligations under contract. A growing organization cannot afford a major loss in cash flow due to default of one or more of its customers.

Whether you want to grow your business in domestic or international markets or simply protect your cash flow from a catastrophic customer event, HUB has the tools, resources and most importantly the people to support your firm's risk management needs.

Planning for Growth

If your business plan includes sales growth and expansion, consider the following questions as part of your long-term strategic planning:

IS THE LARGEST ASSET ON YOUR BALANCE SHEET INSURED?

Your business incurs credit risk every time you extend credit to your customers. Accounts Receivable, one of the most liquid and valuable assets on a balance sheet, supports an organization's cash flow yet it is often one of the most unprotected asset classes.  

CAN YOUR ORGANIZATION SUSTAIN A CATASTROPHIC CREDIT LOSS?

In an uncertain global economy, companies who sell on open credit terms expose their accounts receivable to bad debt losses and thus cash flow constraints. The inherent risks associated with bad debt losses are greater and deeper than ever before. These losses often occur as a result of non-payment due to a customer's insolvency, protracted default, cyber event, political risks or acts of war that prevent contract performance and/or failure to perform the obligations under contract. A growing organization cannot afford a major loss in cash flow due to default of one or more of its customers.

ARE YOUR FOREIGN LOCATIONS PROTECTED AGAINST POLITICAL PERILS?

Foreign property and assets are subject to much broader risks than those located in your home country. Are your assets protected from confiscation, expropriation, naturalization, unfair taxation, terrorism, war, political violence and its resulting business interruption and currency inconvertibility?

Whether you want to grow your business in domestic or international markets or simply protect yourself from catastrophic customer events, HUB International has the tools, resources and most importantly the people to support your firm's risk mitigation needs.

How Trade Credit Insurance Works

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 customer. By assuring payment, credit insurance can strengthen your company's balance sheet and enhance your borrowing power, helping you grow 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)

HUB INTERNATIONAL TRADE CREDIT & POLITICAL RISK

HUB International's Trade Credit and Political Risk team of experts can assist your organization in building customized credit risk mitigation solutions based on your specific needs and business model. Our dedicated experts can work with you to identify your organization's risks and limitations and develop key strategies to help you succeed in any environment.

As a leading insurance brokerage, HUB has strong relationships with all of the top rated Credit Insurance carriers in North America as well as access to carriers overseas. 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, either by the debtor or the trade credit insurer within the terms and conditions of the policy.  

 

What is Trade Credit Insurance?

Trade Credit Insurance offers protection against non-payment of accounts receivable by customers who become insolvent or experience difficulties in meeting their debt obligations to your organization. Trade Credit Insurance can also serve as a proactive vehicle to assist your organization in achieving its risk mitigation objectives, addressing areas of weakness in credit risk management disciplines, executing growth initiatives while protecting your organization's balance sheet.

SOLUTIONS:

  • Reduce sales concentration risk
  • Expand sales into new territories
  • Minimize bad debt reserves
  • Reform credit management practices
  • Enhance borrowing abilities
  • Protect shareholders value

Learn More

What is Political Risk Insurance?

Political Risk Insurance helps investors, financial institutions and corporate clients protect their investments in overseas markets against unpredictable losses caused by political risk perils. A foreign government's action, or inaction, can result in a client's loss of property, income or financial assets.

Insured Perils:

  • Political violence, such as revolution, insurrection, civil unrest, terrorism or war
  • Governmental expropriation or confiscation of assets
  • Selective discrimination
  • Forced abandonment / forced divestiture
  • Business Interruption
  • Inconvertibility of foreign currency or the inability to repatriate funds

Our Expertise

HUB International offers a team of seasoned specialists with experience in working with small/medium to Fortune 100 enterprises. We work with all insurance markets and specialize in risk management, credit/finance analytical support, knowledge of domestic and global credit management, extensive retail, energy, textile, food, and tech sector expertise, claims proficiency, ongoing senior management involvement and unmatched dedication to our clients.

To learn more about our services and our team, please contact us:

 Damion Walker
Damion Walker
Senior Vice President
Executive Liability Practice
949-623-1030   Direct Line
213-219-1991   Mobile
Damion.Walker@HUBinternational.com
 Vanessa De La Cruz 
Vanessa De La Cruz
Senior Vice President 
Executive Liability Practice 
310-568-7618   Direct Line
626-376-7540   Mobile
Vanessa.DeLaCruz@HUBinternational.com



                                                                                                                

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