Accounts Receivable Insurance for Businesses
Credit Eureka is one of the most experienced business credit insurance agencies in the world for companies seeking to reduce accounts receivable (AR) nonpayment risks. Unlike other agencies, our Team has first hand experience analyzing trade credit insurance from all the angles; as company credit managers buying insurance, as bankers insuring trade financings, as underwriters analyzing companies and structuring insurance, and as brokers of insurance. We’ve placed policies on diverse sales terms, countries, and industries – from artichokes in China to life saving oncology drugs to renewable energy power plants. Whether companies purchase for themselves or for their customers, we understand the strategic value and importance of maximizing our Clients access to this source of credit.
Explore the costs of business credit insurance, learn about rates, the financial impact of events overseas, and educate yourself on issues surrounding business credit insurance on this website. For more information, reach out to Credit Eureka for a custom trade credit insurance quote.
What is Business Credit Insurance?
Accounts Receivable credit insurance (“Trade” Credit) protects Sellers from financial loss due to their Buyer’s failure to pay. Coverage is available in over 150+ countries around the world. Triggers are customer bankruptcy, simple non-payment for a protracted period of time, or a government or civil event in customer’s country. Insurers partner with the Seller to share up to 90% of the face value of accounts receivable (or 95% when caused by a political or civil event). The insurer and Seller set pre- agreed dollar maximums for the buyers and countries (e.g. domestic vs. international, country-based limits, for individual buyers or whole portfolios).
How does it work to pay a loss?
The seller files a claim for the buyer’s outstanding accounts receivable (AR) balance. To settle the claim, the insurer confirms the outstanding buyer debt, takes action to collect the debt (including legal action as needed). In exchange for the seller assigning its interest to the insurer, the insurer pays the seller.
How is is business trade insurance priced?
Depends on insurer, and whether protection is for one or more buyers. Premium is usually calculated by:
- for multiple buyers, its a quoted rate (a % of 1%) × estimated $ volume of insured sales annually, or
- for single buyer, its a quoted rate (a per annum rate) × $ accounts receivable balance to be covered. (i.e., similar to a loan).
Who are the insurers in the Trade Credit Insurance marketplace?
Credit Eureka works with over 25+ investment grade insurers worldwide, each with different geographic capabilities, industry expertise, & pricing.
How do I get started?
We’re ready to learn about your business and provide a solution. Reach out to us for a consultation on any issue, ranging from trade credit insurance (generally) or AR Puts to specific issues such as export credit insurance, political risk insurance or even working with EDC Consulting.