Credit Insurance

Company Credit Insurance – it makes sense to manage your risk

Credit insurance is a term used to describe both business credit insurance (also known as Trade Credit Insurance) and consumer credit insurance, e.g., credit life insurance, credit disability insurance (also known as credit accident and health insurance), and credit unemployment insurance.

Credit insurance or trade credit insurance (also known as business credit insurance) is an insurance policy and risk management product that covers the payment risk resulting from the delivery of goods or services. Trade credit insurance usually covers a portfolio of buyers and pays an agreed percentage of an invoice or receivable that remains unpaid as a result of protracted default, insolvency or bankruptcy. Trade credit insurance is purchased by business entities to insure their accounts receivable from loss due to the insolvency of the debtors. This product is not available to individuals.

The costs (called a "premium") for this are usually charged monthly, and are calculated as a percentage of sales of that month or as a percentage of all outstanding receivables.

Trade credit insurance insures the payment risk of companies, not of individuals. Policy holders require a credit limit on each of their buyers for the sales to that buyer to be insured. The premium reflects the average credit risk of the insured portfolio of buyers.

In addition, credit insurance can also cover single transactions or trade with only one buyer.

At KL Surety we only provide our clients with Trade Credit Insurance on a Single Risk basis.

Our customers are purchasing Business credit insurance to insure themselves against non payment of an outstanding balance by a trading partner.

 

Single Risk

Sometimes a company may become concerned that it is particularly exposed to non-payment of a particular debtor. If you are concerned because the debtor has a poor credit record we probably can't help you because we will be equally concerned. If however you are concerned because the company owes you a lot of money and IF they were to default it would cause major problems for you then we may be able to help. Our trained and experienced staff can help you manage risks up to $250,000.

Please note we don't do 'Nils'.