Trade Credit Guaranty | Trade Credit Insurance
The following is a general guide to Trade Credit Insurance, and you must, of course, check the wording of your own individual policy for the full terms and conditions applicable to you.
Trade Credit Insurance is designed to work in support of your established credit control procedures. Although policy terms and conditions may vary, there are four 'key' elements for cover to be effective:
Get Your Credit Limits
You must have a Credit limit agreed for each customer. This can be assessed and set by yourself, up to a pre-agreed level (under most policies), or specifically approved by the Insurer. (the Credit limit should equate to the maximum level of debt to which you would be exposed at any one time, taking into account, payment terms, average payment delays, and seasonal fluctuations in trading levels).
Report Problems
You must notify the Insurer of any customer who has not paid beyond a pre-agreed period of time (typically 60 days) after original payment due date (most Insurers restrict this reporting to larger debts only).
Claim in Good Time
In the event of a loss arising against an insured customer, you must complete and submit a claim as soon as possible, and in any event, not later than 6 months after the date of loss (we provide a comprehensive claims handling service). For claims arising as a consequence of your customers Insolvency, a claim is normally paid within 30 days of the debt having been confirmed. For claims arising as a consequence of your customers Protracted Default, a claim is usually paid 6 months after original payment due date. For claims on export sales arising as a consequence of Country Default, or Political Risk, a claim is typically paid 4 to 9 months after date of loss (this varies country to country).
Pay the Premium and Other Charges
You must pay all premiums and other charges within the specified terms of the relevant policy. This is a condition precedent to admission of liability for a claim.
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