Trade credit insurance is a type of insurance designed to protect businesses against the risk of non-payment by their customers. It covers the risk of a buyer failing to pay for goods or services due to insolvency, default, or other credit-related issues.

Types of Trade Credit Insurance

Single-Buyer Insurance

Description: Covers non-payment risks from a specific customer.
Purpose: Ideal for businesses that have significant exposure to a single customer.

Whole Turnover Insurance:

Description: Provides coverage for all or a large portion of a business’s accounts receivable.
Purpose: Suitable for businesses with numerous customers, offering broader protection against non-payment across their entire customer base.

Domestic Trade Credit Insurance:

Description: Covers risks associated with domestic transactions within the same country.
Purpose: Protects businesses against non-payment risks from domestic customers.

Export Trade Credit Insurance:

Description: Covers risks related to international transactions and exports.
Purpose: Protects against non-payment by foreign buyers, helping businesses expand into international markets with reduced risk.

Benefits of Trade Credit Insurance

Risk Management: Mitigates the risk of financial loss due to customer non-payment, providing financial stability.

Improved Cash Flow: Ensures that businesses receive payment even if a customer defaults, which helps maintain healthy cash flow.

Access to Financing: Lenders may offer better terms or higher credit limits to businesses with trade credit insurance, as it reduces their risk.

Customer Assessment: Provides valuable insights and credit assessments on potential and existing customers, helping businesses make informed credit decisions.

Support for Growth: Facilitates safe expansion into new markets by protecting against the risks of non-payment in unfamiliar or high-risk regions