Trade Credit Insurance

Protecting your
business’ cash flow

Remove the uncertainty

Providing goods and services to customers can leave you in a vulnerable position if one or more of them don’t pay. Although you may be able to manage some of the smaller bad debts, large unexpected losses could be devastating for your business.

Remove the uncertainty

What is Trade Credit insurance?

If you trade or sell goods on a credit basis, you’re at risk of bad debt or nonpayment by customers. This can disrupt your cashflow and leave you out of pocket.

Trade credit insurance is important for protecting your income and business assets against potential customer failure. With the right cover, you can grow your business confidently, knowing you can be protected if things go wrong.

Trade Credit Insurance an effective risk management tool that can:

Protect and improve your “cash-flow”
Enhance your balance sheet, optimise working capital and reduce the cost of finance
Increase your sales and profitability
Improve and strengthen your credit control and management procedures

Who should consider it?

All registered businesses that sell goods and services on credit terms, such as 30 days to pay, should consider trade credit insurance. This includes businesses that trade domestically and internationally.

Some trade credit insurance policies also offer the bonus of working with designated collection agencies to help you recover your debts – taking the pressure off this difficult and time-consuming process.

Not all policies are the same. Exclusions, the excess you need to pay and limits of liability can vary greatly depending on your insurer. That’s why our our specialist broking team members get to know your business enabling them to provide considered advice delivering you the best policy for your specific needs.

Touch base with us to learn how we can help you.

HDL, the right partner for you.

Did you know?

59.8%

On average, 59.8% of Australian businesses pay their bills on time, while 9.5% pay more than 60 days beyond invoice terms.

(Dun & Bradstreet, Late Payments in Australia, Dun & Bradstreet 1st Quarter Analysis, 2017)

15.3

The average late payment time for Australian businesses is 15.3 days late

(Dun & Bradstreet, Late Payments in Australia, Dun & Bradstreet 1st Quarter Analysis 2017)

Big to small payment times showed a clear pattern of larger firms paying smaller firms at a delayed rate; big companies paid other big companies even later.

(Dun & Bradstreet, Late Payments in Australia, Dun & Bradstreet 1st Quarter Analysis 2017)

What can it cover?

Depending on your policy, trade credit insurance can cover:

Type of cover	Potential benefits
Comprehensive cover	Protecting your entire credit portfolio, including domestic and export customers.
Excess of loss	Suitable for businesses with strong internal credit management processes who want cover for exceptional loss across their entire portfolio.
Key account	Covers Key Account for clients requiring protection on their largest buyers; optional non-cancellable credit limits and deductibles.
Single buyer	Covers single buyer coverage for quality credit risks.

Case study

As a small winemaker who has been exporting overseas for five years, Debra faces two challenges. Like other winemakers, she has a long working capital cycle. Secondly, there’s the risk of non-payment, especially among new export clients.

Debra only exports small shipments and takes out trade credit insurance. This strategy pays off, as she sends a shipment to a new client who doesn’t pay. After unsuccessful attempts at getting the payment, Debra makes a successful claim on her trade credit insurance.

The insurance payout covers her loss, which fills the gap that the nonpayment made in her cash flow. This means she doesn’t have to borrow money to keep her business going.

Complimentary Review

Securing optimal insurance protection is becoming more challenging.

Having a fresh set of eyes can make a dramatic difference. HDL welcomes the opportunity to evaluate and challenge your current risk and insurance program in a confidential manner that avoids disrupting existing relationships.