In business, timing is just as important as a solid business plan and access to capital. You want to ensure that you make the right choices at the right time. Considering trade credit risk insurance before the need arises is one of those right choices.
What is Trade Credit Insurance?
Basically, this type of policy gives you added security when extending credit to existing customers. If a new or existing customer fails to pay for delivered goods, the insurance covers you against those losses.
The right type of credit risk insurance also allows you to pursue new customers that might otherwise pose a risk. Your company has a chance to grow through increased sales.
Benefits of Getting Trade Credit Insurance Coverage
Access to trade credit is a way for you to build customer loyalty and conquer new markets. However, this powerful tool also comes with risks that can hurt your cash flow and working capital. One way to manage is with insurance that covers those risks.
You are covered for bad debt, which improves cash flow uncertainty and working capital ratio.
Types of Trade Credit Insurance Coverage to Consider
The four types of trade credit risk insurance policies include:
1. Key Accounts
2. Single Buyer
3. Transactional
4. Whole Turnover
Premium costs for each policy vary based on which policy you choose.
Insurance Protects Your Accounts Receivable and Business
No matter what you may do, unpaid invoices are not unusual in business. Trade Risk Group is a leader in trade credit risk insurance. Contact them today at https://www.traderiskgroup.com to learn how they can help.
