What Is Trade Credit Insurance?
Trade Credit Insurance is an insurance product that protects against the risk of non payment of a trade account receivable. EIA-Global’s Trade Credit Insurance policy (sometimes known as export insurance) indemnifies the policyholder for the amount of the gross invoice value for goods or services that are unpaid due to commercial or political risks. Policies are written on a 12 month, renewable basis, covering all goods or services shipped or delivered to customers during the policy year. An Insurance Premium is charged based on the assessment of the risk and for the risk transfer to the insurance company. There is always some risk sharing in the form of a small Self Insured Retention or Coinsurance (usually 5-10%).
INSURED RISKS:
EIA-Global insures against non-payment for:
COMMERCIAL RISKS
• Bankruptcy or Insolvency of the Buyers
• Protracted Default (past due customer)
POLITICAL RISKS
• Failure to Pay by Government Buyers
• Currency Inconvertibility / Transfer Risk
• Hostile Actions by governments that prohibit payment
Why Buy Trade Credit Insurance?
Trade Credit Insurance from EIA-Global has several important benefits including risk mitigation, sales expansion and attractive financing capabilities.
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• Risk Management |
Protects against non-payment on trade receivables |
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• Sales Expansion |
Increases sales by offering more competitive selling terms to buyers |
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• Attractive Financing |
Facilitates traditional financing strategies regarding working capital and/or asset based borrowing Provides the collateral for creative financial solutions including: - Non-recourse “off balance sheet” financing - Revenue recognition strategies - Receivable securitization |
Contact EIA-Global today for your Trade Credit Insurance & Export Insurance needs - your cost effective way to protect against the risk of non-payment of your trade account receivables.
