Trade Credit Insurance: The How and Why

February 23, 2021

Picture that your insured’s business regularly extends credit for its customers; however, in difficult economic times, some customers may fail to or may be unable to pay those bills. Unless your insured demands “upfront” payment OR is covered by trade credit insurance, such situations make them vulnerable to bad debt and leave them without a solution.

Now, you may have heard the phrase “Trade Credit Insurance” for a while now, but have you ever stopped to ask yourself, “What is this coverage, anyway”? To quickly summarize, Trade Credit Insurance is designed to protect a company’s cash flow by ensuring that the company’s accounts receivable gets paid. In most cases, the insurance functions even if the payment failure is caused by the customer’s bankruptcy, default, political risks, or other reasons agreed to by insurers.

Beecher Carlson’s Executive Liability Practice put together our take, available below, to help you determine if trade credit insurance is right for you.

 

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