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Whole Turnover Insurance

With whole turnover insurance, an underwriter contracts to cover all eligible business transacted by a policyholder within an agreed period — usually 12 months. Underwriting control is exercised primarily through a credit limit set for each buyer covered. For larger limits, the figure is set specifically by the underwriter, but it is common for policyholders to have discretion to set limits for the majority of their customers on the basis of their credit and collection procedures.

The level of indemnity is high — usually 80% to 95%, with some underwriters giving a higher percentage of cover for vetted customers as compared to discretionary limits. Premium is payable as a percentage of insured turnover, which must be declared monthly, quarterly, or annually by the policyholder. Whole turnover policies can be based upon domestic or export trade, or a mixture of both. Underwriting is done on the basis of previous loss records, future turnover and trade expectations, and the quality of customers.