It is important to safeguard your company from bad debt, particularly if your organization depends on a small number of customers for a significant part of your earnings.
Remarkably, many businesses are unaware of trade credit insurance and how it can help their business by mitigating risk. Credit insurance, also known as accounts receivable insurance or company credit insurance, is an insurance product that protects companies against debt.
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In most cases, if a business owns a accounts receivable insurance plan, and one or more of your customers covered by the agreement defaults, the insurance policy will pay.
Oftentimes, the insurance premiums are charged to the policyholder every month and are calculated as a percentage of outstanding receivables. For businesses, this implies that policies may be tailored for your special needs, picking the customers that you desire to insure.
The way trade credit insurance can help your business is:-
-Protection against bad debt, especially against the potentially devastating effect of one of the key customers defaulting on paying the debt.
-It allows companies to more rapidly expand their business to new and emerging markets in a secure and cost-effective method.
-It makes you smarter, helping you to increase credit lines to existing clients, enter new markets, or extend credit to new clients armed with the information you need to make intelligent, informed decisions.