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WHY RECEIVABLES INSURANCE?

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WHY RECEIVABLES INSURANCE?

Accounts Receivables are one of your company's most valuable assets, but also the most susceptible to unforeseen losses which could lead to material consequences.

 

Receivables insurance is designed to protect businesses against the risk of non-payment or default by their customers (buyers) for goods or services provided on credit terms due to insolvency, bankruptcy, political risks, or other specified reasons. It is also known as Trade Credit Insurance or Accounts Receivable insurance. 

 

There are a number of benefits to receivables insurance beyond protecting against non-payment

  1. Enhanced Credit Management: the insurance company often assists businesses in evaluating the creditworthiness of potential customers, helping them make informed decisions about extending credit.

  2. Improved Cash Flow: With insurance coverage in place businesses have more confidence to offer credit terms to customers, leading to the opportunity to make more sales.

  3. Access to Financing: Lenders consider a company’s insured receivables as better collateral when seeking financing.

  4. International Trade Protection: International trade risks such as political instability, and foreign buyer default can be covered by Receivables Insurance.

 

Receivables insurance typically covers a specified percentage (~90%) of the insured invoice amount in the event of default. Terms and conditions vary depending on the insurance provider and the policy chosen.

 

If your business frequently extends credit terms to customers and has a significant portion of assets tied up in accounts receivable talk to us about how receivables insurance can safeguard your financial stability and minimize the impact of customer defaults.


CASE STUDIES

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EXTENDING
CREDIT
TERMS?

If your business frequently extends credit terms to customers and has a significant portion of assets tied up in accounts receivable talk to us about how receivables insurance can safeguard your financial stability and minimize the impact of customer defaults.

Ask Us How

3001-1 Adelaide Street East

Toronto, ON M5C 2V9

416 526 6548

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