A guide to business credit risk insurance
If you run a business, there is insurance available which will help protect you from operational losses. There are often times when events occur which are out of your control, leading to a financial loss for your business. One example is credit risk insurance, which is used by many businesses to safeguard their cash flow.
In This Guide:
- What is credit risk insurance?
- What are the benefits of credit risk insurance?
- Do I need credit risk insurance?
- Is cheap business insurance available?
What is credit risk insurance?
Credit risk insurance is designed to protect businesses from financial losses if debtors do not pay on time. If your business sells a service or product, with a set amount of time to pay, and the customer does not pay, your business could be financially protected with credit risk insurance. This will ensure your business is able to trade as normal with a healthy cash flow and balance sheet.
What are the benefits of credit risk insurance?
The main benefit to your business is the financial protection against customers who don't pay or become insolvent. This assurance will enable you to trade with confidence and pursue potential opportunities, without the worry of non-payment. It is also possible to access an increased range of credit facilities, as lenders will offer favourable terms and more products if they know your debtors are covered by credit risk insurance.
The insurer will assess the potential credit risks of your customers, which can aid with risk management. This trade-related information in regards to the creditworthiness of your potential customers will help you decide whether a buyer should be offered credit. The insurance company will provide a credit limit, which is the maximum amount of insurance cover they are willing to offer against potential non-payment. The insurer will continue to assess their creditworthiness, and you will be notified if this changes.
It is also possible to take out a credit risk insurance policy with a company that is able to offer advice on various collection techniques. This will improve the chances of your business being able to collect any outstanding debts, in the event of a customer avoiding payment.
Do I need credit risk insurance?
Businesses of all sizes and industries should benefit from credit risk insurance, as it will help protect the financial position of the business. For example, if your business has to invest heavily in materials or spend a vast amount of time providing a service, your business could face significant financial problems if the customer does not pay.
As a business owner, you should think about whether you want protection against potential losses. If you already have protection against accidents, theft or professional mistakes, credit risk insurance is another policy which you should consider. You need to think about the potential risk your business faces from customers who do not pay and whether you can afford to lose the income.
Is cheap business insurance available?
If you are unsure which credit risk insurance providers are available, it is possible to quickly compare credit risk insurance policies. By shopping around and taking the time to compare business insurance, it is possible to arrange cheap business insurance which meets the exact requirements of your business.
The cost of your business insurance will depend on the type of business you operate, the level of credit customers are offered and the value of potential claims. Our service can help you compare credit risk insurance from the leading providers so that you can negotiate the best possible price.
Prices for credit risk insurance can vary significantly, as every business has its own cover requirements. This means there is no policy offered which is designed to provide cover to every business. We can help you find cheap business insurance, without compromising on the level of cover your business receives.
We only partner with credit risk insurance providers which we know and trust. When you compare prices with us, it is possible to compare business insurance from multiple providers. Our team of business insurance experts can help you find the credit risk insurance policy which ticks every box. We search the market for the best deals in order to save you time and money. To begin, simply provide us with the key details of your insurance requirements and we will get to work finding the best policy for you.
If you would like some advice about finding cheap business insurance, our experts are always here to help.