Learn how accounts receivable insurance will protect your business from bad debt and unpaid invoices, preserving your cash flow and supporting trade.
Yes, you can insure your accounts receivable. This type of insurance may also be referred to as trade credit insurance. This protects your cash flow by compensating you for unpaid invoices and severely delayed payments.
Depending on your policy, accounts receivable insurance usually covers:
- Customer bankruptcy
- Political risks that may impact your customers’ ability to pay
- Refusal or inability of your customer to pay within the terms of your contract
Atradius Offers Accounts Receivable Insurance for Businesses of All Sizes
Since 1925, Atradius has been helping business remain stable and protect their accounts receivable. We offer a variety of products to match any budget and business size form small businesses to global corporations.
Benefits of accounts receivable insurance
Insuring your accounts receivable is good business practice. It forms the central core of strong credit risk management strategies performed by all sizes of business, from SMEs to multinationals. The benefits of accounts receivable insurance – also known as trade credit insurance and debtor insurance – include:
Protecting your business from the bad debts of others
Whether through insolvency, default, or political risks, your customer may fail to pay you.
Having accounts receivable insurance means that, no matter what (in line with the wording of your policy), you can still get paid. No matter how long you have known your buyer, you don’t always know what is impacting their business.
Even the strongest trade relationships with longstanding accounts can be jeopardized by unforeseen circumstances. There is only thing more detrimental to the stability of your business than losing a customer. That is losing a customer while also not getting paid for services rendered or product delivered. This is why accounts receivable insurance is an essential tool for protecting your bottom line.
Exploring new markets and growing your business
Accounts receivable insurance is used by many businesses to enable trade.
It can be particularly useful when exploring new markets. Most credit insurance companies will conduct their own research into your prospective customers, adding another layer to your own due diligence.
The best accounts receivable insurance agencies function as a strategic source of information to help the growth of your business. The expertise and knowledge of underwriters working in your sector can further support your understanding of a potential market and underpin your decision-making processes.
Improving your access to finance
Banks tend to be risk averse. Proving that your receivables are insured can help you demonstrate your bottom line is secure. This can enhance your negotiations with finance providers. Having accounts receivable insurance may lead to lower interest rates, a higher credit line, or may even be the difference between approval and denial of a loan.
How to find the right accounts receivable insurance for your business
Accounts receivable insurance is designed to protect the accounts receivables of all sizes of business.
No matter whether you are responsible for the accounts of an SME, a national business that trades solely within the U.S., or a multinational trading worldwide, there will be a solution that is ideal for your business and its needs.
The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms.
Nothing herein should be construed to create any right, obligation or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person.
Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.