Trade Credit Insurance Network

Trade Credit Insurance Network

The cost of a ‘bad debt’ should be treated much more than simply the loss of money owed. The truth is, one can never make up for the cost of a bad debt. The impact can put stress on cash flow and will damage a company’s bottom line. What would be the consequences of one of your largest customers failing to pay?

The value of the debtors’ ledger (money owed) is one of the largest assets of a business and yet it is often not insured.

Other business assets are normally insured, yet the risk to a business of customer insolvency is one of the most volatile exposures.

What risks are covered by a credit insurance policy?

Commercial Risk:

• Customer insolvency
• Protracted default

Export and Political Risk:

• Contract frustration (due to war, civil war, riots or commotions)
• Inconvertibility of currency (inability to pay in the invoiced currency)
• Cancelation of import or export licences
• Contract cancelation (resulting from action by the Government of the buyer’s country)
• Contract repudiation (customer’s failure to accept goods)

Five Questions to Ask Yourself

1. What would the impact on your business be if your largest client could not pay you?
   
   
2. When was the last time you reviewed the credit worthiness of your top 20 risks?
   
   
3. How do you assess the credit worthiness of a new or potential client?
   
   
4. How do you monitor the credit risk factors of your debtors?
   
   
5. What do you do when an account becomes overdue?

Five Reasons Why You Can Sleep Better Tonight

1. Preserve profit: Too often and too late businesses realise that a bad debt is really lost net profit; a bad debt reserve is not the answer. It won’t put cash back in your hands.
   
   
2. Protect liquidity and cash flow: The proceeds of a credit insurance claim inject liquid funds back into a business.
   
   
3. Confidence to expand: Allow growth, knowing that the cost of potential failures has been covered. Hold a competitive advantage whilst others operate with uncertainty.
   
   
4. Strengthen credit management: Firm credit limit decisions are provided on the larger debtors of the business, based on sound analysis and information.
   
   
5. Add security: Insuring your debtors ledger often provides a new source of security to offer banks.

Why Use the Trade Credit Insurance Network by UnisonSteadfast?

With more than 700 brokerages across the globe, UnisonSteadfast has the strength of the largest insurance broking network. UnisonSteadfast offers a lot of bargaining power within the industry to tailor policies and provide unique solutions for their clients.

The Trade Credit Insurance Network by UnisonSteadfast are specialist trade credit insurance brokers in partnership with your general UnisonSteadfast brokers. Together we can design a customized policy that protects your business from non-payment.

For more information on the Trade Credit Insurance Network by UnisonSteadfast, please contact wolfgang.mercier@unisonsteadfast.com.