Trade Credit Insurance: Frequently Asked Questions

Non-payment of covered invoices caused by buyer insolvency (bankruptcy, receivership, liquidation, composition with creditors) or protracted default — extended non-payment of an undisputed debt past the policy waiting period. Export policies can add political risk perils including currency inconvertibility, transfer restriction and public buyer default.

Disputed invoices (until resolved in your favor), exposure above a buyer's credit limit, shipments after a required stop-shipment date, sales to affiliates or consumers, pre-existing overdue amounts at inception, and — absent endorsement — government buyers.

Most whole turnover policies price between 0.10% and 0.44% of insured sales. A $20 million book might pay $30,000–$66,000 annually; the minimum account premium is $15,000. Loss history, buyer concentration, terms of sale, industry and country mix drive the rate.

The maximum insured exposure on a single buyer. Larger buyers receive limits underwritten by the carrier; smaller buyers can fall under your discretionary credit limit (DCL) — authority to self-underwrite within documented procedures.

The buyer simply does not pay an undisputed invoice, without a formal insolvency event. The claim becomes payable after a waiting period, commonly 90–180 days past the original due date.

Credit insurance protects receivables you keep, invisibly to your customer, at roughly 0.10%–0.44% of sales. Non-recourse factoring sells the receivable to a factor at 1%–4% of invoice value plus interest, and the buyer pays the factor directly. Many companies combine them: insure the ledger, finance with a lender at improved advance rates.

No. The policy is a contract between you and the insurer. Buyers are not notified, and coverage does not appear anywhere in the sales relationship unless you choose to disclose it.

Substantially. Lenders commonly increase advance rates from 70–80% to 85–90% on insured receivables, admit previously ineligible accounts (foreign, concentrated, extended-term), and accept the policy as assigned collateral support. The borrowing-base benefit alone frequently exceeds the premium.

Yes. Single buyer policies cover one obligor — appropriate where one relationship dominates your risk. Expect name-specific underwriting and pricing driven by that buyer's financial condition.

Yes. Export credit forms cover foreign receivables and can add political risk perils. Our San Juan and Santo Domingo offices underwrite Latin American obligors in Spanish with local documentary standards in view.

With a complete application — aged receivables, two years of financial statements, and buyer schedule — indications on straightforward risks are typically available within days, and policies bind on acceptance of terms.

The application collects sales and loss history, receivables aging, buyer spread and your principal accounts with requested credit limits. Attach your most recent aged A/R listing, two years of financial statements, and your credit procedures if written ones exist.