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It’s fair to say that many SMEs (small to medium sized business) have suffered losses due to the non-payment of invoices from their customers (business to business transactions).

Since many businesses deliver their products or services on credit terms, and since accounts receivable can be one of your largest assets, an accumulation of unpaid invoices can seriously impact your business’s cash flow.

The easy solution is to take out an insurance policy that protects your business against debts due to customer insolvency or default. This type of insurance cover is called Trade Credit Insurance and is a risk management tool that covers your business for both Australian and overseas transactions.

Who needs Trade Credit Insurance?

Any business that sells goods and or services on credit terms (to other businesses) can benefit from Trade Credit Insurance. This is because businesses that operate on credit terms are easily exposed to bad debts or unpaid accounts that can quickly add up to a substantial amount of your accounts receivable. Since changing your business model is often impossible, you need an easy way to mitigate these financial risks and protect your cash flow and profits.

What are the benefits of Trade Credit Insurance?

Trade Credit Insurance protects your business against the non-payment of business to business transactions and are tailored to your specific needs. This type of insurance policy has 5 important benefits for your company or organisation.

  1. Cash flow relief: Not being held hostage to unpaid debts allows your business to maintain its cash flow at all times.
  2. Insolvency protection: If a customer becomes insolvent, but still has accounts unpaid, your business will be protected against these losses.
  3. Increased sales: If you don’t have to worry about unpaid accounts, you can offer your customers better credit terms, build stronger relationships and gain a competitive advantage.
  4. Better bank financing: When you invest in Trade Credit Insurance, banks are much more inclined to lend your business money, simply because you become less of a risk.
  5. Trade with confidence: Trade Credit Insurance helps to support good credit management and enables your business to trade with confidence, even in a highly competitive market space.

What type of coverage is available?

Trade Credit Insurance cover is available for local, regional or global transactions and can be tailored to cover all accounts, your top accounts only, specific accounts or even a single account.

If your business can benefit from Trade Credit Insurance, then call us today on 07 3174 5016 or email cathy.ellwood@clearinsurance.com.au.


General Advice Warning

This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Clear Insurance strongly suggests that no person should act on the basis of the information in this document, but should obtain appropriate professional advice based on their own circumstances. Clear Insurance Pty Ltd is a Corporate Authorised Representative (No. 465935) of Insurance Advisernet Australia AFSL No. 240549, ABN 15 003 886 687.