Structured credit insurance protects your business from the failure or refusal of the borrower, for any covered reason, to pay an amount (principal and/or interest) due under an insured loan obligation. It is applicable to a wide range of financial obligations, including loans, guarantees, and documentary credits.
Under a non-payment insurance (NPI) policy, the peril that causes the non-payment event can be very broad, from the insolvency of the borrower to a political risk event that prevents repayment of monies owed. It is available on a secured, non-secured, and trade-related or non-trade (working capital) basis, depending on the underlying contract and other elements of the transaction.
Additionally, it can be used to cover risks in short-, medium-, or long-term timeframes, as would be most relevant to a particular client account, and in both emerging and developed markets. It is sometimes referred to as “contract frustration insurance,” for its ability to decrease the stress associated with non-payment of accounts receivable.