Why do traders take out Credit Insurance?

Why take out a credit insurance policy: Learn about the benefits of credit insurance and how it can protect your business.

  1. To prevent bad trade debt by having buyers vetted by the credit insurer to assess if the buyer can pay on time each time a sale is made to them
  2. To enhance their credit control and cash flow positions. By insuring receivables against unexpected customer insolvencies and undue delays (protracted default) the trader gets relief from the risk of non-payment
  3. To be compensated for insured losses
  4. To obtain objective credit risk assessment on the buyer
  5. To sell more safely to new customers – local and export
  6. To expand sales to existing customers
  7. To develop a trusting business relationship
  8. If needed, to acquire additional working capital by using a trade credit insurance policy as collateral for its bank financing package

Related content

What is trade credit insurance?

If your customer fails to pay, trade credit insurance safeguards your business. In many instances, credit insurers may cover up to 90% of the debt.

What is credit risk?

Credit risk is a term applied to the dangers associated with lending anyone goods, services or money.

Why credit management is important?

The way you approach credit management can determine whether your business thrives or fails:

Disclaimer

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.