Protecting against the risk of non-payment, and the failure of a customer to pay their trade credit debts, is becoming increasingly pertinent. And this is where credit insurance comes in.

Credit insurance is suited to all manner of businesses, regardless of whether they are trading nationally or internationally. In terms of size they can also be anything from annual turnovers of £250,000 right through to the turnovers of the largest multinationals. Credit insurance provides an early warning that a business is in financial difficulty, allowing a customer time to withdraw from the relationship on a structured basis, reducing exposure gradually.

Another positive aspect of credit insurance is that it assists businesses with targeting their sales effort, focusing on profitable buyers and markets, and avoiding financially weak customers or politically unstable export territories. It can also be used to provide greater security to a lender for trade or export finance, and thereby provide greater access to finance.

Having credit insurance as part of a credit management strategy helps businesses develop and obtain a competitive edge, while at the same time building relationships and credibility with their customers by enabling them to trade 'safe in the knowledge' that they are protected against bad debt.

Information provided by: 

Euler Hermes is the world's premier credit insurer, offering solutions for the management of trade receivables, from credit insurance and financing of trade receivables to bonding and guarantees. Euler Hermes is a subsidiary of AGF and a member of Allianz. www.eulerhermes.com