Trade Credit insurance is also commonly known as Accounts Receivables insurance. Trade credit insurance provides protection on the accounts receivable of the company and thereby guarding them against a customer default due to any reasons. It is the best way to protect the company’s profit margin
By purchasing Trade Credit Insurance, you can choose right customers or markets to trade in and provide the right credit limit. In case your customer is not able to pay due to any reason, the insurer will transfer you the amount of insured invoices and collect the debt from your customer.
In order to be eligible for Trade Credit insurance, the goods and services you want to insure should be shipped or provided directly from Canada. Goods and services to be insured must not involve prohibited and unlawful products and services like addictive substances, hazardous goods, military goods etc.
A number of factors affect the cost of credit insurance. Risk portfolio, historical loss, number of customers insured, customer base are some of the factors. As an estimate, annual premiums are approximately 0.1% to 0.4% of total insured annual sales.
For companies that operate and trade in Canada.
For companies that trade in foreign countries.
For companies that perform both domestic and international sales.
For companies that want to insure a single buyer or a particular transaction.
For companies that have maximum sales concentrated with a few selected customers.
For covering all risks associated with an underwriting policy after it is exhausted.
It comforts the insurer with the guarantee that during the period of insurance, the approved country and buyer limit will not be cancelled or reduced.
No buyer limit fee will be applied. New buyers can be added and approved buyer’s coverage can be increased with no additional cost.
Special coverage can be crafted by recognizing uniqueness of the business model and identifying its needs.