Illustrative example
An approved customer becomes insolvent with an eligible invoice unpaid. The policy may reimburse the insured portion of that debt after applicable conditions and retention.
Receivables and customer insolvency
Trade credit insurance
An unpaid invoice can quickly become a cash-flow problem.
Trade credit insurance may cover an insured share of eligible receivables affected by specified customer insolvency, non-payment or protracted default. Approved credit limits, reporting, overdue-account management and recovery obligations are central to how the policy operates.
Preparing the review
What information usually matters?
- Annual credit sales, payment terms, debtor ageing and bad-debt history.
- Largest customers, requested limits and customer concentration.
- Countries, currencies, political risks and export exposure.
- Credit-control procedures, collections and overdue-account reporting.
- Existing security, guarantees, factoring and lender requirements.
Important boundaries
Disputed invoices, unapproved limits, related parties, late reporting and excluded countries may not be covered. The policy does not replace sound credit control.