Every business should have a strategy in place to manage bad-debt losses. On average, 40% of a company's assets are in the form of trade debts. Predicting which clients will default, even with DnB reports and bank references, is very difficult. Close to 50% of all payment defaults arise from customers with stable and long-term trade relationships. A trade credit insurance policy helps manage your accounts receivable and compensates you in the event of non-payment.
Trade Credit or Accounts Receivable Insurance can guarantee your invoice amount paid from 80% up to 100%. The payment can be insured due to insolvency, protracted default (disputed payments), political risk, and currency devaluation. If you have to file a claim, you'll notice most claims are paid out within 60 days of filing.
