Does Your Business Require Trade Credit Insurance?

October 1, 2021

Trade credit insurance protects you if your clients default and fail to pay for your goods or services, and it’s a great way to protect yourself from the costs of protracted default. As a credit management tool, it’s invaluable – and it can give you peace of mind at your small business.

But is it right for your business? Learn more about this risk management tool, and see why trade credit insurance may be the best way to protect yourself from bad debts.

You Sell Most Or All Of Your Goods Or Services On Credit

Any business that sells goods on credit payment terms like Net 30 or Net 60 days knows that they are taking a risk that their customers may not pay in time. However, extending credit to businesses makes it easier for them to buy your goods and can increase your customer base.

Trade credit insurance is a great way to balance the benefits of selling on credit with the risk that your customers fail to pay according to your terms. If a customer doesn’t pay and defaults on their purchase, your insurance broker will compensate you for the loss. 

You’ll Face Difficulties With Working Capital If Customers Fail To Pay

If you work mainly with just a few large companies and provide them with large credit limits, for example, and one fails to pay or defaults, you could face a serious cash crunch that may result in cash flow and working capital difficulties – potentially leading to layoffs, business slowdowns, and other issues.

You Want A Safety Net To Protect Your Accounts Receivable

Your credit portfolio is a great asset – and if you are worried that it’s not protected from customers who may fail to pay, an additional layer of protection from a trade credit insurance policy is a fantastic choice. 

You’ve Had Problems With Corporate Debt Collection Services In The Past

Debt collection is not easy in a corporate setting. If a company goes bankrupt or simply disappears, you may not be able to recover the cash you need – even if you hire an experienced corporate debt collection service.

But with trade credit insurance, your insurance broker is responsible for going after bad debts. You don’t have to worry about it – you’ll be compensated for your loss, and you can continue operating your business normally.

Your Business Works In Countries With Political Risks

Political risk coverage is a common add-on to trade credit insurance policies. It protects your company in the event of civil unrest, civil war, banking and monetary issues, regulatory changes and other political risks that may cause your business partners to default on their payments. 

Learn More About Trade Credit Insurance From Niche Trade Credit Now!

If you run a small business and you’re interested in learning more about how trade credit insurance can protect your company, contact Niche Trade Credit right away. As a leading trade credit insurance broker in Australia, we’re always here to help. 

We have decades of experience working with companies of all sizes in Australia – and we can help you find the trade credit insurance policy that’s right for protecting your business. So don’t wait. Get in touch today on 02 8416 0670.

*DISCLAIMER: No person should rely on the contents of this publication without first obtaining advice from a qualified professional person. This publications sold on the terms and understanding that (1) the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication; and (2) the publisher is not engaged in rendering legal, accounting, professional or other advice or services. The publisher, and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication. Without limiting the generality of the above, no author, consultant or editor shall have any responsibility for any act or omission of any other author, consultant or editor.