Coverage / Marine and trade
Trade credit
The policy is only as good as the credit limits behind it.
Protection against buyer insolvency and protracted default, used to secure receivables financing.
01 Scope
What it may cover
Subject to wording. Insurers differ; a sound policy answers these three points.
Non-payment by buyers due to insolvency or protracted default.
Domestic and overseas buyers, where selected.
Support for receivables finance by assigning the policy to a bank.
02 Placement
What affects price and terms
Underwriters price what they can see. These facts come first, so we present them before they ask.
Debtor book: concentration, territories and payment terms.
Bad debt history and collection procedures.
Financial information available on key buyers.
Whether the bank requires the policy for financing.
03 The underwriting file
What we need from you
- Aged debtor list with the top 20 buyers.
- Bad debt history for five years.
- Credit management procedure.
- Facility terms if the policy supports a loan.
A complete file reaches more markets and returns firmer terms. Gaps are priced as uncertainty.
04 At renewal
Common gaps at renewal
01Limits assumed, not confirmed
Cover applies only up to the limit the insurer approves for each buyer.
02Overdue reporting missed
Late notification of overdue accounts can reduce or remove a claim.
03Policy terms not aligned with the bank
Loss payee and assignment wording must satisfy the lender before drawdown.
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