Trade credit insurance

What is trade credit insurance?

Trade credit insurance provides protection of accounts receivable (sales to buyers on credit) from losses due to credit risks, such as default, insolvency and bankruptcy.

Cover is up to 90% of invoices value.

The buyers can be in the same country of the insured business (domestic trade) or in another country (export).

The main purpose of the trade credit insurance is to transfer the risk of payment default to the insurance companies so the business can be more involved in trading and marketing.

Defaults can lead to catastrophic results on businesses:

– Dependency on clients payment behaviors.

– Burden in trying to collect overdue invoices.

– Liquidity and cash flow difficulties.

– Credit Losses due to unpaid invoices.

– Difficulty to be granted loans from banks.

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Policy and Credit Limits

• Merchant fills-in the customer application, describing the business, the sales , the buyers, etc.

• CST issues the offer to the client.

• Signature of trade credit insurance policy between the merchant, the insurer & CST.

• Merchant sends buyers’ applications to CST

• CST provides the “credit limit advices” per buyer

Production and defaults

• Merchant reports sales and payment delays on monthly basis

• Merchant declares a claim two months following invoice due date (Or payment extension period)

• CST provides a claim’s decision within two months following receipt of declaration and documents

• The insurance company settles the claim within two months of claim’s acceptance

• Rights of insured subrogated to insurance company – CST handles the recovery process

Top benefits to use trade credit insurance

Protection

against losses due to insolvency or due to default

Better rates

Negotiating better rates and limits with banks.

Information

Investigation and assessment of the credit worthiness of new customers.

Monitoring

Continuous monitoring of existing customers credit worthiness.

Download Application

or Upload application .

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