The amount & type of coverage to buy depends on:
- How much of your receivables you want to insure
- Your outlook on your buyers’ ability to pay
- How generous you are with payment terms
There are several types of this insurance:
A Whole Turnover Policy will cover all your receivable sales. This is the most common type of Trade Credit Insurance. It’s useful because it grants you blanket coverage and you don’t have to worry about which buyer may or may not default.
A Key Accounts Policy will cover selected buyers only. This is useful if you have a few big accounts (you’d have serious cash flow issues if they didn’t pay), or you are selling to new buyers (you don’t know their credit risk).
A Single Buyer Policy will cover one buyer. This is useful if you are selling to a new buyer (you don’t know their reliability), or have poor experience/expectations of payment from a specific company.
A Transactional policy will cover one receivable transaction. This is useful if you usually sell on cash terms, but are now making a big sale on credit (and you want to ensure you get paid.)
Trade Credit Insurance can be pretty complex. It’s best to speak with an experienced broker who can craft a custom plan for you. Speak with our industry experts today!
