Accounts Receivable are one of your company’s most valuable assets, and also one of the most vulnerable to unforeseen losses which could potentially have catastrophic consequences. Trade Credit Insurance pays you when your clients no longer have the ability to stand by their payment obligations.
Credit Insurance offers protection against losses caused by bankruptcy, non-payment or political risk.
- Catastrophic risk protection
- Mitigate credit risk and allow for safe, aggressive growth
- Reduce general losses
- Broaden international footprint by penetrating new foreign markets
- Gain a competitive edge by replacing Letters of Credit for open terms
- Protection against political events and changes in regulations
- Increase borrowing margins/rates with your lender
- Include export receivables in borrowing base
- Reduce reserves for doubtful accounts
TOP 10 Reasons why businesses buy Trade Credit Insurance
Protection – Secure your trade and get paid on invoices for which payment has been lost due to default
Efficiency – Make the right business decisions, improve operating efficiency and maintain profitability
Peace of Mind – Sleep well at night knowing that your outstanding sales are secured and protected
Maneuver with Confidence – Gain the confidence to enter new and untapped markets
Profitability – Improve and secure your profitability
Funding and Banking – Secure your receivables to improve your banking relationship and access to capital
Cash Flow Improvement – Complement your existing credit procedures and controls to improve DSO (Days of Sales Outstanding)
Aggressive Growth – Gain the ability to safely increase credit limits to existing clients and offer open terms to new clients
Competitive Edge – Offer open credit terms to gain an edge over competitors who may not offer similar terms
Insight and information – Gain access to additional customer insight and information to improve business decisions
Q & A - Trade Credit Insurance
“What risks does trade credit insurance cover?” Trade credit insurance covers non-payment (protracted default and insolvency) and typically includes political risk coverage for companies dealing in export markets.
“I only have domestic receivables… Can I use this product?” Trade credit insurance can be a valuable tool for companies who hold Domestic Receivables, International Receivables, or a combination of both.
“Do I have to insure all my receivables, or can I select certain buyers only?” Though not all companies wish to insure their entire buyer portfolio, a full portfolio option is the most cost effective way to protect yourself against non-payment. Depending on your company’s needs, there are various options available to you and your business:
Whole Turnover / Full Portfolio – Being the most common option, this policy will cover your entire portfolio of buyers and will be structured accordingly. Premiums and rates are based on annual insured sales. This option is the most cost effective way to protect your receivables and offers full coverage over an entire portfolio of credit risk.
Single Buyer / Specific Risk – A policy designed to cover one single account/debtor for companies who have buyer concentration issues.
Key Account / Specific named coverage – A policy designed to cover your most important buyers or a segment of buyers above a certain threshold in order to protect against the possibility of catastrophic loss.
Medium / Long term Coverage – A policy designed to protect contracts spread over a period of time longer than 12 months.
“My profit margins are very thin and I cannot afford to pay premium for this protection…” BFL CANADA offers very competitive premium financing options to our clients. For companies operating on thin profit margins it is much more important to implement preventative measures to avoid being put into a reactive situation when faced with an unexpected loss.
Example: If your company operates on a 6% profit margin and you were to incur a $50,000 loss, what amount of additional sales would you need to break even on that loss? The answer is simple: more than $800,000 in additional sales.
“Why choose BFL CANADA as my exclusive Credit Insurance Broker?” First and foremost; there are no additional costs when using the expertise of a specialized broker. As a specialized Trade Credit Insurance Broker, we provide the representation you need in order to:
- Ensure your policy structure properly represents and reflects your specific needs
- Remain aware of other options which may be available to you in times of need
- Receive continuing support throughout your policy term
Our Trade Credit Insurance specialty brokers deal EXCLUSIVELY with this one line of insurance coverage and dedicate their time and efforts to your specific needs, without getting bogged down in other insurance placements.
Below are some of the benefits of dealing with a BFL CANADA Trade Credit Insurance specialty broker:
- Create competition among insurers
- Bring all relevant markets to your doorstep, including broker exclusive markets unavailable to you directly
- Present multiple options
- Negotiate for you with your interests as our number one priority
- Consult with you and make recommendations based on your specific needs
- Continuous support throughout the duration of the policy period
- Claims advocacy and support throughout the claims process