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How To Protect Your Business From Bad Debt?

Whether trading and offering a credit line to your customers in settled times, let alone times of economic turbulence,
a Credit Insurance policy serves as a very powerful and beneficial financial tool.

Credit insurance (often referred to as “customer bad debt protection”) offers you the peace of mind and comfort that your credit sales are covered from the risk of your buyer defaulting, whether due to:

➢   Insolvency, 
➢   Payment Default 
➢   Or due to a Political cause

Volatile Economy
The economic climate remains volatile due to a variety of Global factors, whether Economic, Political or the general speculation over Brexit which has stimulated many questions and much uncertainty over the future – so being in control of one of your company’s major assets (your Trade Debtors) is paramount.

New perils

Companies that were once deemed “blue chip” and robust enough to absorb economic impact are now vulnerable to new age crime, such as Cyber crime & Cyber Fraud. These new perils now make some of your stronger customers as susceptible to failure as perhaps the not so strong customers, particularly with no real control over providing ultimate protection.

...So how does Credit Insurance work?

Credit insurance works by replacing lost working capital, thus protecting your Sales & Profit should one or more of your customers fail due to any of the aforementioned reasons.

1. Enables You to Make Informed Decisions
The specialist Underwriters provide high levels of customer insight enabling companies to make informed decisions on growth with existing customers as well as new ones, and it enables you to consider supported diversification.

2. Protects your Balance Sheet 
The wider benefits of a Credit policy are that it can assist with protecting your balance sheet, supporting your credit management, it can assist with budgeting and also acts as a Sales enabler to name but a few.

3. Coverage for Most Sectors Available
Credit insurance vastly covers most sectors; from Retail to Electronics and Food to the very high risk Construction sector to name a few. 

Credit insurers understand the scope of cover that is required, e.g: 
➣   From Purchase Order (i.e Work-in-progress cost) 
➣   Invoices/applications 
➣   Retentions 
➣   Binding Contracts (providing you cover until the very end of a project or contract)
    4. Sophisticated Systems
    In fast moving times specialist credit insurers have had to evolve, not only to keep up, but to stay ahead in terms of having the very latest financial information possible. Their software and systems are extremely sophisticated in order to keep on top their databases of hundreds of thousands of companies around the world and some even allow interaction on either a manual or automated basis to your preference.

    Tailor Made Cover       
    Specialist insurers can offer policies tailor-made to your specific requirements, such as:

    Whole Turnover:
    This is the most traditional and comprehensive form of cover available, offering the maximum level of protection across your entire sales ledger / book of debtors. 

    Top-Account Cover / Selective Cover:
    Simply choose to cover your larger exposures or key customer accounts.

    Specific Account Cover:
    Select one key customer account for credit insurance.

    Catastrophe Cover / Excess of Loss (XoL):
    This offers valuable protection in excess of a policy deductible allowing protection for very large exposures & risks at a modest premium.

    ICB Group and Credit Insurance
    ICB Group has an experienced Credit Insurance department that specialises in well designed credit policies. We have access to all the specialist insurers to ensure we provide a bespoke solution to fit your business demands and needs.

    For more information, watch our quick 2-minute video, which further explains the 
    benefits of Trade Credit Insurance:
    Click here

    Please don't hesitate to contact Umberto if you have any queries regarding Credit Insurance.

    Click here to email Umberto

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