Trade credit insurers offer a wide range of flexible products and policies, which are designed to cater for each company’s different coverage requirements. When seeking out such coverage, you should engage with a broker who has experience and expertise with global risk issues and trade finance solutions. Our experts can assist you with assessing and developing your specific requirements and then help you select the most appropriate coverage.
Coverage can be structured in a variety of ways, including:
Whole turnover: This is the most common policy type, which covers a company’s entire trade receivables portfolio under one policy, insuring a wide range of domestic and export transactions.
- Key accounts: This policy is designed to insure a company’s largest customers or another defined band of coverage where the greatest risk exists (i.e., selective cover).
- Single risk: This policy is designed to insure exposures related to one customer.
- Excess of loss: This policy is designed to cover catastrophic or exceptional losses of the largest customers above the normal level of bad debt, by setting a suitable deductible level.
Each of the policies can cover domestic sales, export sales, or a combination of both – and can be defined regionally or globally. Political risk insurance is often included.
Given all of these options, for many businesses, trade credit insurance remains affordable: coverage costs typically represent less than 1% of sales revenues.
Trade credit insurance is a dynamic product. Credit limit requirements on customers change throughout a policy period, reflecting changing business needs. Therefore, Marsh typically supports its clients in many interactions with insurers to obtain or increase credit limits.