Credit insurance

what is credit insurance

Credit insurance (also known as Trade credit insurance, business credit insurance or export credit insurance) is an insurance for companies of all sizes (small, medium and large companies) to cover non-payment risk. This is a guarantee of the receivables against the risk of customer payment default.
Trade credit insurers generally cover short-term commercial and political risks for periods of between 90 and 180 days.

Good to know: Each year, one in four businesses disappear because of unpaid receivable.

Credit insurance companies offer three services:

Prevention and customer risk monitoring;
Optimization and debt collection;
Compensation for losses (up to 90% of net amount and up to 100% if there is recovery of the amount of the claim).

Insurance money is defined in the credit insurance policy up to an amount outstanding.
50% of trade credit insurance is used as part of factoring to ensure the funded receivables.

Warning : credit insurance does not cover payment delays. To address this need, your company can subscribe to complement a factoring contract.

The benefits of being insured credit

Prevention : All credit insurers offer information on in real time about the financial health of all your customers or your prospects.
Information : you get a daily monitoring on the financial status of your customers and you can be alerted in case of deterioration.
Debt Recovery : in case of unpaid, the insurer supports amicable and legal steps to recovery.
compensation : If recovery fails, your company is compensated up to 95% of net amount of the unpaid invoice.

The credit insurance guarantees

The trade credit insurance cover non-payment from commercial risk in Dubai and abroad.

It is possible to take in option other types of risks:

Political risk : involves non-payment under an export contract or project due to the actions or inactions of a buyer’s government.
Manufacturing risk,
Risk of natural disasters.