Tysers Insurance Brokers | Trade Credit Insurance

PRODUCT HIGHLIGHT

Trade Credit Insurance

Protecting your business from the unexpected.

While most businesses plan for potential bad debts, unexpected insolvencies can still pose a serious threat to financial stability. In particular, the loss of a major customer can have far-reaching consequences.

Moreover, even if you know your own customers well, you may not be aware of who they’re trading with. Often, companies default not due to poor management, but because their own customers have failed to pay — creating a ripple effect that could leave your business unpaid.

To safeguard against these risks, many companies choose trade credit insurance.

What is Trade Credit Insurance?

Trade credit insurance offers vital protection against non-payment caused by customer insolvency or prolonged default. With this safeguard in place, businesses can extend credit more confidently, knowing they have a reliable safety net to support their cash flow and reduce financial risk.

What are the benefits of Trade Credit Insurance?

The main benefits of credit insurance are:

  • It can be used as security for finance from Banks & Invoice Finance providers.
  • It allows you to assess and monitor your ledger to ensure customers remain creditworthy. Most insured companies see a marked improvement in the credit worthiness of their ledger.
  • It allows you to identify and target good quality new business prospects with the confidence that you will get paid for your goods or services.
  • It allows you to develop new export relationships in unknown territories. This may be especially important to you post-Brexit.

How much does credit insurance cost?

The cost of trade credit insurance varies depending on several factors — including your business sector, annual turnover, previous bad debt history, and the type of policy you require. Because every business is different, we recommend speaking with us directly to arrange a personalised quotation.

Frequently asked questions (FAQ’s):

Have a query? Take a look at our FAQ’s below. If we’ve not covered your query please contact us.

  • Is credit insurance suitable for SME's?

    Yes, many SME’s use Credit Insurance to secure their growth. We have several SME options for businesses with turnover under £500,000 with minimum premiums starting at about £2500-£3000.

  • Is it only suitable for small businesses?

    No. Many multinational and large UK based companies use Trade Credit policies to mitigate risk as part of their corporate governance and to protect their owners or shareholders.

  • Do I have to insure all my customers?

    No, but it is often the most economical option. You can insure a single or group of customers, but the percentage cost can increase the more selective you are.

  • Can I buy cover for a single customer?

    Yes, but the Insurer acceptance rules are often tougher than for a whole ledger option and premiums are relatively higher.

  • Can Insurers cancel cover on a customer?

    Most policies give the Insurer the ability to re-assess the buyer limit and if the situation deteriorates they could reduce or cancel the limit for future deliveries. Any deliveries already made would always be covered in full and most current policies provide a 30 day grace period to allow you to trade out.

  • Why should I insure my customers?

    Customer relationships are key to your business but do you know everything that is happening to your customer? They may have issues with their own Customers or Suppliers which could impact on your debt and by the time you find out it can often be too late. Credit Insurance can be your costed bad debt reserve covering any failure however large or unexpected.

Why choose Tysers?

Tysers have specialist knowledge in Trade Credit Insurance and can help and guide you through the implementation of a policy as well as helping the policy blend with your existing Credit Management procedures.

Contact: Trade Credit Insurance

For more information contact our specialist team:

40%

of most businesses’ assets are their debtors. Companies would not dream of not insuring their other assets – so why not insure the risk exposure your debtors present?

All of the Credit Insurers we use are ‘Investment Grade’ so are at least Standard and Poor’d A- or equivalent. This may be important to your bank or funder if they are looking to the policy as security.

£1 M

£100,000 bad debt for a company with a 10% net margin requires £1 million additional sales just to cover the shortfall.

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