Protects a company from its customer’s failure to pay their trade related debts
Credit insurance, also called accounts receivable insurance, is a financial tool that protects a company from its customer’s failure to pay their trade related debts. This situation can occur if a customer becomes insolvent or if they simply fail to pay within the agreed timeframe.
A credit insurance policy eliminates one major source of business uncertainty the impact of unpaid invoices. Indemnification against loss is often believed to be the main benefit of a credit insurance policy, but there are other benefits that can justify the cost of a trade credit insurance policy many times over even if you never make a claim when your receivables are insured, your company can.