Percentage of coverage

A trade credit insurance covers all of  your accounts receivables up to a percentage of coverage for your entire balance sheet. this coverage rate that a trade credit insurance coverage policy offers are set when you purchase your policy.

The credit insurance coverage rate or Percentage of coverage accurately indicates the ability of the credit insurer to cover the outstanding amounts on a customer or prospect.
The Percentage of coverage varies according to the financial quality of the customers or prospects.
This percentage of coverage is variable if the clients are named (between 75% and 95%) or not named (between 50% and 65%).
It is always lower for undenominated customers because the credit insurer takes more risk.
When the debtor’s rating is good, it is possible to benefit from a higher coverage rate by applying for a credit limit from his credit insurer.

The credit insurer’s objective is to find the best match between the amount of insurance premiums and the coverage rate of the trade receivables item.
This rate is an essential point in the choice of the credit insurer.

Good to know : The credit insurer calculates the premium rate based on:
– the size of the company,
– of insurable turnover,
– the number and profile of clients and the risk on these clients.