Why do traders take out credit insurance?

Why take out a credit insurance policy: Learn about the benefits of credit insurance and how it can protect your business.

  1. To prevent bad trade debt by having buyers vetted by the credit insurer; this allows to ensure the buyers are correctly identified and can pay on time each time a sale is made to them
  2. To enhance their credit control and cashflow positions. By insuring receivables against unexpected customer insolvencies and undue delays (protracted default) the trader gets relief from the risk of non-payment
  3. To be compensated for insured losses
  4. To obtain objective credit risk assessment on the buyer
  5. To sell more safely to new customers – local and export
  6. To expand sales to existing customers
  7. To develop a trusting business relationship
  8. If needed, to acquire additional working capital by using a trade credit insurance policy as collateral for its bank financing package

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Disclaimer

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, advice 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.