The Benefits Of Trade Credit Insurance

Trade credit insurance can be a fantastic asset for a business, as it provides cover for businesses who are owed money or a service. If debts aren’t paid, your business won’t suffer as a result. This is designed for businesses of all sizes and offers both international and domestic trade protection. We are going to introduce the benefits of trade credit insurance, so you can see how it can be transformative for your business and to protect it moving forward into the future. 

Protect Against Non-Payment

The first benefit of trade credit insurance is simply the protection against non-payment. For example, you are a construction company and you provide a service. If your business is not paid for that service for whatever reason, the insurance will provide cover for the losses and minimise the disruption to your cash flow, so your business will not suffer. 

You may rely significantly on one particular job, for example building 100 houses on a new development, and non-payment can completely crush a business. So, you know your business will be protected should the worst happen. The cover is generally around 90% although this will differ depending on the specific policy. 

Expand Your Business Safely

Another significant benefit of trade credit insurance is that you can expand your business safely. There is often financial concern around expanding into new areas of business, as you are entering the unknown. This is particularly the case with international trade, which can be very turbulent and unreliable at times. 

So, specific international trade credit insurance can help to solve this problem, so you can expand your business confidently, knowing that you have financial protection. If you are wanting to expand your business but the financial element is holding you back, investing in credit insurance can be completely transformative. You can expand without the element of risk. 

Stronger Banking Negotiations

A third benefit of credit insurance is that you have stronger banking negotiations as a business. When you have credit insurance with a reputable company, this is seen as collateral to banks, which can then allow you to expand further with additional funding. You are generally seen as a more reliable business when you are covered by trade credit insurance. 

Final Thoughts

There are more benefits to trade credit insurance depending on the specific type of credit insurance and also the type of policy. All in all, any business trading on a credit basis should invest in credit insurance, in order to protect their business, expand safely and establish stronger banking negotiations. 

It is always good to work with credit insurance brokers, as they are specialists and will be able to find you the best deal at the right price. Also, if you do need to claim in the future (although we hope you won’t), the claims process can be extremely long winded and complicated, but if you choose a broker, they will be able to deal with the entire process for you.