Are you looking to increase your trade and sales while reducing the cost of credit management? A key account trade credit insurance policy might be what you need. This policy provides protection and financial flexibility and can potentially reduce costs.
What is a key account trade credit insurance policy? How could it benefit you? Let’s take a closer look at this type of policy to get the answers you need. We’ll explore what it covers, how it works, and why it could be an effective tool for mitigating risk.
What Is Key Account Trade Credit Insurance?
A key account trade credit insurance is an agreement between a business and an insurer who protects against losses resulting from bad debts. The policy can cover local and foreign buyers and be customised to the business’s specific needs.
Key account trade insurance insures the business against the risk of loss if a key customer fails to pay for goods and services offered on credit terms. It can provide peace of mind to businesses by assuring them that they are protected in such instances.
A key account trade credit insurance policy can be an invaluable tool for businesses since it gives them the security they need to continue operating smoothly.
How Can a Key Account Policy Benefit Your Business?
Some of the operational and financial benefits of key account policies include the following:
- Cost Savings – Key account coverage is normally done on A-grade entities, and the cost saving of a key account policy is large compared to a Whole book policy. For example, if you had to insure a whole portfolio of $100 million with 25% loss protection, you would need $25 million in coverage. However, with a key account policy, you would only need $5 million in coverage for that portfolio.
- Accessible Funds – Another benefit of obtaining Key account coverage is that it can be used as collateral for funding from Banks or financial institutions. Insuring your key account can also increase your credit limit. This means getting working capital or funds for expansion or development can become much easier.
- Increased Trade and Sales – one of the biggest advantages of insuring key accounts is that it gives your customers peace of mind when they agree to trade with you. This results in increased trade and sales opportunities.
- Understanding Credit Risk in a Single Buyer Environment – Key account trade credit insurance policies are designed for companies dealing with a single major customer. It provides added protection against nonpayment from a single buyer and allows both parties to benefit from the added security.
Contact Niche Trade Credit Today
At Niche Trade Credit, we understand that every business is different and has unique needs regarding key account trade credit insurance. Therefore, we are devoted to working with you to tailor a policy that meets your specific requirements so you can focus on what you do best – running your business. Contact our credit insurance brokers today to learn more about how we can help protect your business from the financial risks of nonpayment by your key customers. Call 02 9416 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.