What exactly is Credit Insurance?

More about what Credit Insurance is:

• Asset Security - Prevents a devastating loss to your company's largest, unprotected assets: your accounts receivable

• Cash Flow Protection - Protects against unforeseen non-payment, slow payment, or insolvencies due to commercial and/or political risks

• Political Risk - Protects assets against political events that could make accounts receivables uncollectable.

• Risk Management - Caps exposure to bad-debt loss that even the best credit management practices cannot foresee.  Balance sheet strength is ensured.  Key account monitoring and back-up support to your existing credit function

• Enhanced Collateral Base and Loan Servicing - Increased borrowing power--more available capital at reduced rates taking full advantage of accounts receivable

What Credit Insurance isn't:

• A substitute for prudent credit management

• Routine bad-debt protection. Credit Insurance is not designed to protect against normal bad-debt losses. Instead it protects against the unforeseen and excessive bad-debt losses which can be financially devastating

• Trade dispute protection

• Factoring

• Valuable Papers or Accounts Receivable Records Property Insurance

Who can benefit from Credit Insurance?

• Any company that sells to other businesses on short-term credit terms (7-150 day terms)

• Manufacturers, wholesalers, distributors, and service providers with annual domestic and/or export sales of at least $3 million

• Target industries
• Food services - Wholesalers, distributors, manufacturers
• Metals - Steel, copper, aluminum, scrap
• Machinery and equipment
• Plastics, chemicals, oil, petroleum, fuel, energy, natural gas
• High-tech
• Transportation - trucking, freight, third party logistics
• Paper, packaging, containers, printing/publishing
• Exporters
• Selling into retail
• Lumber and building materials wholesalers
• Balance sheet driven companies
• Growth companies

Businesses that are NOT a good fit for Credit Insurance:

• Law firms
• Real estate
• Commercial real estate
• Government
• Retailers
• Hospitals
• Jewelry
• Construction
• Home builders
• Marble and tile

Key Questions...

What amount of receivables lost would seriously hurt your company's financial stability or yearly profit? How many accounts carry a receivable over this amount?

On your balance sheet, what percentage of total assets is represented by your customers' accounts receivable?

Are there any new or higher-risk customers to whom you are restricting sales?