Trade Credit Insurance
Key questions and answers about trade credit insurance, what solutions it offers, and why companies who purchase it prefer to use specialty brokerages vs. purchase directly from a single insurer. Here are answers to some key questions:
What is trade credit insurance:
- An insurance contract purchased by suppliers in which an Insurer pays a Company when its commercial customer doesn’t.
- In special cases, the contract may instead be purchased by the commercial customer and issued in favor of the supplier.
What is the trigger?
- If a customer has filed some form of bankruptcy and/or — even broader –the customer hasn’t paid for purchased goods and services within 90 days of the invoiced due date.
When do I get paid?
- General rule is 45 to 180 days after filing a claim. Depends on insurer and customer country.
Why do companies buy trade credit insurance?
- Credit insurance is used to increase sales to existing & new customers.
- When a customer purchases on open account terms, their resources for making payment aren’t visible (common globally). The seller is taking all the risk. The bigger the sale, the more risk. Credit insurers offer protection on over 80,000,000 companies globally.
- Credit insurance is used for financing sales to foreign customers and key accounts
- Offers highest $ amount of credit for financing
- Unsecured basis (no liens, filings)
- Inexpensive
- Credit insurance is a global cash flow preservation tool to prevent loss or disruption caused by customer defaults/nonpayment and country defaults.
What is crediteureka’s value to its customers? More credit. For Less.
- There are over 20+ insurers, government agencies, and banks globally offering some form of credit insurance. The providers differ significantly in:
- which and how many customer accounts they can write,
- what $ amounts they can write for each customer
- which countries they have experience
- which industries have experience
- which contract clauses they offer
- portfolio vs. single customers
- triggers
- cancelability of the customer coverage – at their discretion or at yours
- timeframe for payout
- rights of insured
We provide our Clients the most customer credits, for the highest $ amounts, on favorable contract terms, at the most efficient price available in the market.
Companies who engage crediteureka receive over 50+ years of collective credit insurance, trade finance, and credit securities experience for corporations and banks. From short term accounts receivable, supply chain financing, commodities financing, international banking, to medium term project financing.
What is the Client’s goal? Get the $ amount on each customer they request, or as close to it as possible. This is the most important piece to the Client. Every $ insured is a dollar less risk to them, a dollar less upfront capital required from their customer, and an additional dollar available to both from their bank lines.
