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Trade Credit Insurance

Trade Credit Insurance

Are you insured if your customers can’t pay?

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0121 452 8707
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If you’re new to Trade Credit, then you’re in the right place to find out more. We are often asked what Trade Credit Insurance is, as many companies are simply unaware of its existence.

What is Trade Credit insurance? In its simplest form, it is a way in which companies can protect themselves if customers who owe your company money are unable or unwilling to pay.

Businesses prosper in times of certainty and stability and good cash flow is vital to ensure the smooth running of any business. That’s where Trade Credit insurance can help – it enables you to do business in the knowledge that if your customers don’t pay, you have a back-up plan.

Doing business in the knowledge that if you don’t get paid by the customer, the insurer will step in. 

There are many reasons people might not pay you – insolvency, lack of cash, or delays in them being paid themselves. So, it’s a huge advantage to be able to put something in place that puts you in control. It’s important to understand that Trade Credit insurance is not a “one size fits all” solution but is a bespoke and personalised service tailored to each company we work with. It’s suitable for businesses with a turnover of more than £500,000 who offer credit to their customers.

Trade Credit insurance is about much more than financial protection. It can provide access to highly valuable reports about the ‘health’ of the companies you are planning to do business with, sector insight and activity in the marketplace – all of which can enable businesses to implement growth plans with confidence, and be in control of the company’s future direction. Trade Credit can free up capital which can be used for growth, making it a genuine asset for your business and enabling you to determine the direction your company is going in.

All of which means Trade Credit insurance offers certainty in an uncertain world.

FIND OUT MORE ABOUT ASTON LARK TRADE CREDIT

Frequently Asked Questions

What is trade credit insurance?

It is a policy which pays you when your customers cannot or will not pay. This could be because their business has gone insolvent or they indefinitely delay payment.

What else will credit insurance provide?

As well as providing cover in the event of a bad debt, a credit insurance policy can also provide financial information on the credit worthiness of your customers, allowing you to make more informed trading decisions at the beginning and in the future.

Many insurers also have their own legal teams to help recover the debt.

Who would need Trade Credit Insurance?

We work with a range of clients from several sectors, including manufacturing, food and beverage, construction, logistics, financial institutions, wholesale and retail.

Companies within these sectors need Trade Credit insurance for many different reasons – they might be going through a period of growth, have previously incurred bad debts, have a concern over certain customers or an opportunity has arisen to increase exports in unfamiliar territories.

Trade Credit insurance is suitable for businesses with a turnover of more than £500,000 who offer credit to their customers

How will I know how creditworthy my customers are?

This information can be provided in the form of an insured credit limit that reflects their creditworthiness alongside insurers sharing their knowledge with their customers.  In the circumstance that one of your customers is experiencing difficulties, they may also be able to provide valuable insights and market intelligence for you.

For smaller credit balances, insurers allow you to grant your own limits; either from a credit rating agency (for example, Experian, Creditsafe or Graydons) or based on your previous trading experience with the customer.  This cover is known as a discretionary limit.

Which insurers do you use?

As an insurance broker, we will approach a number of insurers to obtain quotations.  You will benefit from:

  • Comparison of quotations from a number of insurers, many of which are only available from an insurance broker
  • Comparison of the cover available for your customers
  • Support and assistance for the lifetime of your policy and claims, queries and cover changes
  • Impartial advice and recommendations on the right policy for your business
Do you provide cover if I trade abroad?

Yes, we provide several different solutions for different sized businesses trading here or abroad.

Will the total of unpaid amounts be recovered?

Insurers will pay 90% of the debt excluding VAT. A minimum excess will apply which is typically £500. However, if the insurer’s legal team is successful at recovering the amount, they will recover 100% of the debt.

How quickly will I get paid?

If the debt is due to insolvency then payments are usually received within 14 days subject to all information being received. If the debt is due to a customer refusing to pay, then there is a waiting period which varies from one insurer to the next but will be between three and six months.

How much will it cost me?

The cost is a very small percentage of your credit sales turnover (typically less than 0.50% of your whole turnover). For example, with a turnover of £2,600,000, you will be charged around £13,000 plus IPT (12%).

The charge is based on your credit sales turnover, the sector of your business, your customers and your previous bad debt history. The minimum cost is usually £3,500.

Please complete our enquiry form for a confirmed quotation.

How is the premium paid?

The cost of the insurance is paid directly to the insurer (monthly or quarterly) on an interest-free basis.

FIND OUT MORE ABOUT ASTON LARK TRADE CREDIT

Downloadable Documents

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Give us a call
0121 452 8707
Request a quote
CLICK HERE

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Aston Lark Limited is authorised and regulated by the Financial Conduct Authority, No. 307663, and registered in England and Wales, No. 02831010. Registered office: One Creechurch Place, London, United Kingdom, EC3A 5AF.

Aston Lark Employee Benefits Limited is authorised and regulated by the Financial Conduct Authority, No. 173304, and registered in England and Wales, No. 02792080. Registered office: One Creechurch Place, London, United Kingdom, EC3A 5AF.

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