Having a credit insurance policy provides assurances for a bank or trade financier and will give leverage in negotiations for drawing down funds against your UK and/or export sales.
A trade financier can be added to your policy as a joint-insured for added protection, or simply as a loss payee, which would entitle them to any claims payments from your policy, should you desire.
A comprehensive list of all your credit limits can be provided to your Financier at regular intervals to provide them with the reassurance they require.
Having a credit insurance policy can often help prevent bad debts occuring.
Once you establish a credit limit on a buyer, the insurer will monitor your risk and provide you with updates of any changes, good or bad, to the risk profile of your customer. This will enable you to increase business with existing customers, and to trade confidently with new customers.
Having a credit insurance policy can be particularly useful in giving you the green light to grow your trade with existing customers, and to commence dealing with new customers with which you had no experience at home or abroad.
You can choose an insurer which integrates the cost of a debt collection service into the price of your policy.
When all else fails, the credit insurance policy protects you from incurring a bad debt by insuring you for the insolvency or default of your buyer.
By using a credit insurance policy within your Credit Management Procedures you are taking every precaution to avoid having a bad debt. However, despite these measures, there will be times when bad debts occur that are unforeseeable and which, in turn, can cause a ‘domino-effect’, bringing down associated companies and trading partners alike.