At Jasmur, we have observed that a significant portion of the current assets on many businesses’ balance sheets is in the form of receivables. However, these accounts receivables are commonly uninsured, despite representing the single biggest asset of many companies. Every creditor faces the risk of non-payment or delayed payment due to customer insolvency, protracted default, and political risks that prevent the buyer from fulfilling its payment obligations. Therefore, businesses need Trade Credit Insurance to protect themselves.

Trade Credit Insurance is bad debt insurance that protects businesses from non-payment of commercial debt. It ensures that capital is protected, cash flows are maintained, loan servicing and repayments are enhanced, and earnings are secure. By investing in trade credit insurance, companies can safely sell more to existing customers or go after new customers that may have been perceived as too risky. It also offers protection against unique export risks and market knowledge to make accurate growth decisions. Banks will typically lend more capital against insured receivables and may also reduce the cost of funds. Additionally, insuring receivables frees up capital for the company.

The insurer monitors the financial performance and well-being of your customers and allocates a grade that reflects the health of their activity and the way they conduct business. Based on this risk assessment, each of your buyers is then granted a specific credit limit up to which you, the insured, can trade and be able to claim should something go wrong. Throughout the lifetime of the policy, the insurer will inform you of any changes that might impact the financial health of your buyers and their ability to pay you for goods or services you have delivered. When one of the buyers shows signs of experiencing financial difficulty, the insurer notifies all policyholders that sell to that buyer, of the increased risk and establishes a plan of action to mitigate and avoid loss. In the event of an unforeseeable loss, the insured policyholder will file a claim with supporting documentation, and the insurer will be indemnified subject to the policy limit.

Any company that sells goods and services on credit terms and is exposed to the risk of non-payment should buy Trade Credit Insurance. However, it only covers business-to-business accounts receivable and does not cover governments or retailers. The premium payable is determined by factors such as insurable turnover, quality of the risk, credit terms offered by the proposer, quality of the credit management, sector of the buyers, countries covered, the spread of the risk, and level of self-retention.

In summary, Trade Credit Insurance is essential to protect your business from the risks of a non-payment or delayed payment of commercial debt. By investing in this insurance, you can expand your sales, enter new international markets, obtain better financing terms, and reduce bad-debt reserves. At Jasmur, we offer Trade Credit Insurance that can provide your business with the protection it needs to manage the commercial and political risks of trade