How Does Trade Credit Insurance Work?

You may be wondering how trade credit insurance works and whether it is the right fit for your business.

Let us explain it in simple terms.

1. Covering the Risk of Non-Payment

When you sell goods or services on credit, you are trusting your customers to pay you back. But what if they don't? It is a risk we all face. Trade credit insurance helps you manage this risk.

If a customer fails to pay, whether because they go bankrupt, delay payments, or face political instability, trade credit insurance protects you. This way, your business stays safe, no matter what happens.

2. Protecting Your Accounts Receivable

Your accounts receivable are the money owed to you. If a customer defaults on their payment, that is money your business cannot rely on. With trade credit insurance, you are covered for up to 90% of the unpaid amount, ensuring your cash flow stays healthy even if a customer doesn’t pay.

3. How the Coverage Works

Here is how it works: you get a policy from a trade credit insurance provider, like Azure Risk. Once you are covered, the provider checks the creditworthiness of your customers and sets limits based on how risky they are.

If one of your customers doesn’t pay, your provider will compensate you for the loss up to the policy limit. This makes trade credit insurance a crucial tool for businesses offering credit to their customers.

4. Monitoring Customer Credit Risk

Another benefit of trade credit insurance is that many providers will monitor the financial health of your customers. This means you will be the first to know if there is any sign of trouble. If a customer appears more likely to default, you can adjust your terms before things go south.

5. Claims Process

Now, what happens if a customer defaults? It is simple! Just file a claim with your trade credit insurance provider. You will provide proof of the transaction and the unpaid amount, and once everything checks out, you will get reimbursed for the covered portion. Helping you recover quickly and keeping your business on track.

Your Insurance Expert

We deliver tailored advice to fit our clients’ requirements and ensure they understand the options available to them. Contact us for a free personalized assessment of your policy needs.

Why Choose Us?

We at Azure Risk combine deep industry expertise with a commitment to understanding your business. Partner with us to protect your operations and reputation with a policy that evolves alongside your company’s ambitions.

Get in touch today to learn how our Freight Forwarders Liability Insurance can safeguard your business, your cargo, and your peace of mind.

How Azure Risk Can Help

At Azure Risk, we understand that every business is different. That is why we offer tailored trade credit insurance solutions to protect your business from unexpected defaults. No matter what you sell, locally or internationally, we are here to ensure your cash flow stays secure.

Ready to protect your business? Reach out today to see how trade credit insurance can work for you!