If one of your customers has filed bankruptcy or gone out of business, you know what the impact has been on your company. Especially if the customer owed you money at the time they became insolvent.
You can protect your accounts receivable against nonpayment—arising from a customer’s bankruptcy or virtually any other credit risk—with a trade credit insurance policy.
When you purchase trade credit insurance, sales to each of your insurable customers get underwritten for a specific credit limit. In the event of a covered default, you can be indemnified for up to 90% of that amount. Once your policy goes into effect, new customers can be submitted for underwriting and addition to the coverage at any time.
The cost of trade credit insurance is low, typically a small fraction of one percent of your insurable sales volume. Whether or not you pass on this incremental expense to your customers, the price of credit insurance is insignificant compared to the coverage’s benefits.
Trade credit insurance does more than mitigate nonpayment risks. It’s a sales tool that can help you grow your business by confidently extending competitive payment terms. And it’s a financing tool that will make your receivables more attractive to banks and other lenders.
Meridian Finance Group has specialized in brokering trade credit insurance for more than 25 years. With offices worldwide, we work with every insurer in the market. Credit insurance policies are structured differently from other kinds of insurance, so beyond negotiating the best coverage for our clients at the lowest cost Meridian provides comprehensive technical support for every policy we broker . . . including in the event of claims.