Accounts Receivable Insurance, also known as credit insurance, protects companies in the event that a customer fails to make its payments.
Accounts Receivable Insurance protects companies from defaulted payments due to the customer going out of business, changing ownership, becoming insolvent or filing bankruptcy.
Accounts Receivable Insurance policies can also cover defaulted payments due to natural disasters and economic, seasonal and political events. Accounts Receivable Insurance can cover both domestic and international clients.
Businesses that don’t or can’t perform credit checks on their customers can often benefit from Accounts Receivables Insurance. Companies with international operations often use Accounts Receivables Insurance to protect from political crisis and corruption.
Insuring your accounts receivables may also encourage banks to give you better loan terms and having Accounts Receivable Insurance may help business qualify for new lines of credit.
The cost of Accounts Receivable Insurance is low, usually a small fraction of one percent based on sales volume. Rates are based on buyer and industry risks, and the company’s previous credit and collections experience and the business terms and conditions. Many companies choose to pass such incremental expense on to customers by adding additional charges for processing payments or for late payments.
Typically the price receivables insurance coverage is small compared to the opportunity to win new business by offering competitive credit terms while limiting the risk of non-payment losses.
Learn more about Accounts Receivable Insurance
Golden Global Insurance experts can help you develop an Accounts Receivable Insurance policy that covers your needs at the lowest possible cost. Call 305-899-5125 to get started.