Trade Credit Insurance: What it is and How it Works

What is Trade Credit Insurance?

Trade credit insurance is a type of insurance that protects businesses from the risk of non-payment by their customers. It is a form of accounts receivable insurance that covers the risk of a customer defaulting on its payment obligations. Trade credit insurance can help businesses to mitigate the risk of bad debts and to improve their cash flow.

How Does Trade Credit Insurance Work?

Trade credit insurance works by providing businesses with coverage for losses incurred due to the non-payment of invoices by their customers. The coverage can be extended to cover both domestic and international sales. The policy will specify the terms and conditions of the coverage, including the deductible, the coverage limits, and the exclusions.