Frequently Asked Questions2024-01-30T16:05:32+00:00

Frequently Asked
Questions

We’ve put together a few Frequently Asked Questions about Credit Insurance to help understand what it is, what it covers, how it’s priced, and some procedures involved in running a Credit Insurance policy.

If this FAQ doesn’t cover the query/queries you have, get in touch with us here and we’ll answer your question accordingly.

What is Credit Insurance?2022-11-15T15:19:35+00:00

Credit Insurance is a business-to-business insurance product that offers protection against unpaid invoices due to a customer’s failure to pay for products and/ or services provided to them on credit terms.

What exactly does Credit Insurance cover?2022-11-25T10:23:48+00:00

Credit Insurance covers non-payment of invoices due to:

  • Insolvency – administration/liquidation or similar insolvency events
  • Protracted Default – the failure to pay within contractual terms of payment
  • Political Risk – the failure to pay due to political events in the buyer’s country
How much does Credit Insurance cost?2022-11-15T15:56:09+00:00

Typically, rates are between 0.2-0.5% of insurable turnover and it is also dependent:

  • The amount of turnover to be insured
  • The sector into which you sell your products or services
  • Previous bad debt experience
  • Levels of cover required on your customers
Can I insure just one customer?2022-11-15T15:32:38+00:00

Yes, you can and you can get a quote for Single Risk here.

Single Risk Credit Insurance can sometimes be more expensive than Whole Turnover Credit Insurance which includes the cover for your Single Risk.

Can I insure just a few of my customers?2022-11-23T11:48:55+00:00

Yes, you can and you can get a Multi-Buyer Quote here.

How does a Credit Insurance policy work?2022-11-15T15:37:23+00:00

First of all, you make sure you have a credit limit on your customer by one of two ways:

1 – by applying to the insurer for the amount of cover you need or
2 – by setting your own Discretionary Credit Limit by using your previous trading experience or a credit report from an approved status agency, up to an agreed, pre-determined amount

Secondly, if your customer has not paid you by pre-determined date (usually 30-60 days past due date) you will be required to let the insurer know and submit a claim for the outstanding amount.

If your customer becomes insolvent or enters into administration or similar event, you can submit a claim immediately for the outstanding amount

I already have Credit Insurance. How can I find out if I am paying too much?2022-11-25T11:26:02+00:00

Get in touch with us and we will conduct a quick review of your current arrangements to establish if you are paying too much.

Does Credit Insurance cover VAT?2022-11-15T15:37:14+00:00

No. In the event of a bad debt, you will submit a claim for the outstanding Net Debt and claim VAT back from the Government via Bad Debt Relief here.

I am already insured but can’t get cover on some customers. What can I do?2022-11-15T14:31:00+00:00

Some insurers have a facility whereby you can purchase additional cover in the event of them not willing to insure a buyer to the full extent.

If this is not available with your current insurer you may be eligible to “Top Up” your existing cover with another insurer. You can get a Top Up quote here.

I have more than one business. Can I insure them all?2022-11-15T15:24:41+00:00

Yes, you can. One business will be the “Lead Insured” and the other/s will be “Joint Insured/s”.

If all companies trade with the same buyer/s you will need to ensure you have a credit limit high enough to cover all exposure.

How much will I get back if I claim?2022-11-15T14:31:19+00:00

Most Credit Insurance policies pay 90% of the net debt in the event of a claim.

In some cases 100% indemnity is available.

How can I get a Credit Insurance policy?2022-11-25T10:47:48+00:00

As a specialist Credit Insurance broker, we offer non-binding quotes upon request.

Contact us or complete the questionnaire for the type of credit insurance you require: Whole Turnover, Multi-BuyerSingle Buyer or Single or Multiple Invoice Insurance

Once we have the information needed to obtain quotes from all the insurer we will approach the market on your behalf and present a summary of terms along with our recommendation of insurer and the reasons why.

We search all Credit Insurance providers to save you time and money.

Credit insurance providers, Allianz Trade, QBE, Atradius, Coface, AIG

What you get when you use Comparecreditinsurance.co.uk

  • A full review of the market
  • Help with day-to-day policy administration
  • Fast claims processing

We know Credit Insurance can be confusing, especially when you are first considering it. From the need to insure just one customer where you are concerned about their growing credit balance to covering all your customers against non-payment for the goods or services you have provided to them on credit terms, Comparecreditinsurance.co.uk will get you covered.

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