Credit Insurance

We can’t predict the future, but we can mitigate the risk^.

Coface Credit Insurance covers you against bad debt, late payments, political risk, pre-shipment risks and more. Protection for your cash flow and future revenue will ensure that if the worst happens, you still get paid.

What is credit insurance?

Credit insurance is a type of business insurance which covers losses arising from non-payment for goods or services.
It means that should the worst happen - a customer’s insolvency or protracted default - the policyholder can protect their bottom line and maintain their cashflow. Find out more in our guide 'what is credit insurance' which includes working examples.

How much does credit insurance cost?

There are credit insurance policies to suit all budgets. Premiums are generally set according to turnover and business profile – including industry sector, number of customers and previous loss history.
After an assessment, the credit insurer will provide a quote that sets out price and policy terms, including amount of cover, level of self-retention (typically 10%), and whether there’s a deductible or minimum threshold for claims.

WHO IS CREDIT INSURANCE FOR?

In principle, credit insurance is suitable for any company that provides credit to another company. Whether you trade in goods or services and in whatever sector you work in, Coface credit insurance policies are taken out specifically for your situation. Coface not only offers credit insurance for the United Kingdom and Ireland, but also companies that operate internationally can take out credit insurance with Coface. This means you have fewer barriers to growing your business internationally.

Is a credit insurance policy different from other types of insurance?

With most types of business insurance, such as employers’ liability or buildings insurance policies, the provider has little contact with their policyholder between renewal times, unless they receive a claim.

By contrast, the best credit insurers actively support a company’s trading throughout the year and provide an early warning system about changes in the risk status of customers so it can avoid foreseeable losses.

To be effective, credit insurance should be a partnership between both parties. The policyholder tells the insurer about customers’ payment behaviour and notifies overdue payments. The insurer feeds this customer information into its database alongside data from other sources, such as financial statements and public records.

Meanwhile, the insurer gives the policyholder access to its wealth of business intelligence and expertise in credit risk. Working together, they can determine the level of credit risk, adjust the level of cover and agree credit limits,assess the financial health of customers and focus on the most profitable.

The benefits of credit insurance

While credit insurance can fit comfortably within any credit management strategy, it compares favourably with alternatives on grounds of:

Cost effectiveness

There’s no need to sacrifice a portion of the invoice amount so the company can maintain a healthy profit margin.
Credit insurance generally includes access to complementary credit management services including business information and collections.

Peace of mind

A contract of insurance.
Credit insurers are regulated by the Financial Conduct Authority in the UK.
Credit insurers are legally required to have reserves to pay claims.
Protect bottom line when trading in a volatile market or uncertain economic period

Level of cover

Cover is not limited to a single transaction as with letters of credit.

Flexibility

Releases working capital to invest in other areas of the business or pre-order stock.
Possible to arrange policy with automatic discretionary coverage up to a certain amount or percentage of sales.

Facilitating growth

Credit risk information helps steer company towards profitable customers, sectors and overseas markets.
The confidence to offer competitive terms and pursue business goals.
Credit insured businesses are more attractive to banks and other investors which should enable them to secure finance on better terms

Looking for effective ways to manage risk and streamline processes?

Coface offers a full suite of services to help you create a safety net against risk before, during and after trade. Saving you time, money and hassle.

1. Check before you trade

Go beyond the standard checks with Coface Information Services. With instant commercial scores, real-time analysis, and supply chain alerts, you can minimise risk, protect supply chains and identify new opportunities.

Instant, real-time results
24 hour global risk analysis
Data adjusted by sector and country

2. Get protected

Coface credit insurance covers you against bad debt, late payments, political risk, natural disaster, pre-shipment risks and more. So if the worst happens, you still get paid.

One of the world’s leading credit insurance companies
Over 4,000 experts operating across 100 countries
Unique, insightful and targeted data-driven intelligence

3. Collect what’s owed

Recover late payments and limit losses with our efficient, stress free debt recovery. We handle everything from initial contact to all follow-ups and collections, providing a single point of contact regardless of the debtor country.