Do I Need Business Credit Insurance?

business credit insurance

What Is Business Credit Insurance?

At Higos, we understand Business Credit Insurance can be an important tool to help provide businesses with replacement working capital should their customers fail to pay for the goods or services they've received. With many reasons why a customer could fail to pay such as bankruptcy, insolvency, experiencing political risks in a foreign country or simply refusing to pay; having bad debts and late payments could lead businesses to financial difficulty and impact their cash flow and profits.

What's the benefits of Business Credit Insurance?

Business Credit Insurance also known as Trade Credit Insurance can provide a variety of benefits for businesses including:

  • A wide variety of cover including cover for all customers, a group of specific customers, or a particular trading partner.
  • Peace of mind against the risk of non-payment from their customers, allowing them to continue focusing on running their business.
  • The ability to help to stabilize their business cash flow and increase profits, particularly when lending to larger companies.
  • If a business requires additional financing having Business Credit Insurance can help to secure better financing terms by providing the reassurance that a business has sufficient cover to be able to pay the monies owed on their financial agreement.
  • For some businesses having the ability to offer their customers payment by credit can increase sales to larger buyers who typically request credit to make purchases. This in turn can help to expand businesses by increased sales and profits to larger companies.
  • Credit Insurance can also provide complementary services such as credit assessment and collections management.

Who Needs Business Credit Insurance?

  • From small and medium businesses (SME) to large corporate and international companies, Business Credit Insurance can be particularly beneficial to help provide cover for any business that sell goods or services on credit terms.
  • Some businesses may require Business Credit Insurance due to specific terms and conditions from a banks finance agreement.
  • A business who is looking to trade with new customers or customers in foreign countries.

What Is Not Covered By Business Credit Insurance?

It is important to note that Business Credit Insurance does not provide cover for private individuals.

What’s is Invoice Factoring?

Invoice factoring is designed to help small businesses access cash for short-term financing by providing businesses with the ability to sell their unpaid customer invoices to a third-party invoice factoring company. After an invoice factoring company purchases outstanding invoices from a business, they can initially send the business a part of the unpaid invoice upfront. Once they have received the full payment from a customer the business will receive the remaining balance owed.

What’s The Difference Between Business Credit And Invoice Factoring

Unlike invoice factoring - which is not always guaranteed to protect a business from non-payment risks - Business Credit Insurance can provide cover for replacing the working capital in circumstances where non-payments occur. This gives businesses the freedom continue working without being concerned about circumstances where non-payments can occur, such as slow payments or large orders.

Bespoke Business Credit Insurance

At Higos, we understand that every business is unique and there’s nothing we love more than finding you the right insurance so you can be confident you're thoroughly protected. That’s why we’ve built a friendly, expert Business Credit Insurance team to provide bespoke, specialist insurance cover, specifically tailored for your business.

If the unexpected should happen, we have a friendly in-house claims team ready to provide a prompt and personal service.

If you’re interested in speaking to a chartered insurance broker for advice or a quotation for Business Credit Insurance get in contact with us at Higos. Alternatively fill out our online request a call-back form and a member from our specialist Business Credit Insurance team will call you back.

Get in touch

For advice or a quotation call 01458 270323