Credit Insurance

Essentially, credit insurance will cover a business' entire turnover - wherever it may be trading - and will include political risks. However, credit insurance can also cover a business' key accounts or exceptional losses.

What is Credit Insurance?

Credit insurance provides a business with protection against the failure of a customer to pay their trade credit debts. This can arise as a result of a customer becoming insolvent or because your customer fails to pay within the agreed credit period. These risks are referred to as 'commercial risks'. The protection covers as standard goods or services sold and delivered, but can be tailored to cover many other risks such as work in progress and binding contracts.

Companies that export can protect themselves against a range of 'political' risks which may prevent or delay payment. Examples include war or civil war in your customer's country; cancellation of the contract by the government of your customer's country; or governmental regulations such as embargo or quotas that prevent the export or import of goods.

Who Uses Credit Insurance?

Companies of all sizes use credit insurance. Euler Hermes has credit insurance solutions which suit the needs of an SME up to the largest multi national company.

Why Should I Consider Using Credit Insurance?

Research suggests that 18% of companies that fail do so because they have experienced bad debt or poor working capital. Businesses protect their tangible assets such as property and plant, but often neglect to cover their receivables which can represent 40% of their current assets.

Credit insurance can reduce the unnecessary cost of bad debt and protect hard-earned success, and provide the cornerstone of secure growth.

Are There Additional Benefits?

There are many additional benefits to using Euler Hermes. These include:

A reduction in bad debt provisions, thereby releasing tied up capital

Better risk prevention through the 'early warning' system provided by the credit limits service, and Euler Hermes extensive information database.

Greater access to finance. A credit insurance policy can be used to provide security to a lender for trade or export finance.

Better sales targeting - our information can be used to target new customers and markets as well as monitoring existing customers.

Representation at meetings of creditors and free legal and practical advice on enforcing Retention of Title rights.

How Much Cover Is Available?

On average, the level of indemnity is 85% but this can vary, depending on the type of policy you choose or on your specific requirements.

How Soon Will A Claim Be Paid?

We will pay a claim within 30 days of confirmation that an insured debt has been admitted to rank in the insolvent estate of your customer, but in many cases we pay considerably quicker than this.