Credit Insurance
Cover that reimburses a business for part of its losses when a customer fails to pay an insured trade debt.
How it works
Credit insurance, also called trade credit insurance, protects a supplier against non-payment by approved customers. If an insured buyer becomes insolvent or defaults beyond a set period, the insurer pays an agreed percentage of the debt. It turns an unpredictable bad debt into a more manageable cost.
Points to weigh
Policies set limits per customer and require you to follow agreed credit-control steps, so sloppy collections can void a claim. Premiums depend on your ledger's risk profile. Keep ageing tight to protect cover, using tools such as the Merion business tools to monitor exposure.
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