Insuring Your Accounts Receivables: A Smart Business Move

accounts receivable insurance companies

For over two decades, we’ve helped organizations accelerate cash flow, control costs, and improve customer satisfaction via our unified AR platform. Explore how Resolve's AI-powered, non-recourse B2B net terms financing transforms cash flow management for invoice-based businesses, offeri... Depending on your business and its specific requirements, Chubb offers multiple ways to safeguard you against the non-payment of invoices by your customers. Coface's expert team and underwriters also offer personalized advice and feedback on your Statement of Comprehensive Income customers.

Protect your business with Coface risk expertise

The premiums for this protection typically range from a fraction of one percent to a few percentage points of insured sales, depending on your industry, customer base, and risk profile. In these cases, your business can opt for alternative options to accounts receivable insurance companies. These options include sophisticated credit management software or using net terms as a service provider like Resolve. Trade credit insurance companies provide a strong safeguard against unpaid invoices.

Types of Accounts Receivable Insurance Coverage

They can anticipate and resolve payment arrears from a customer to minimize your bad debt. This one policy approach enables them to offer a standard and transparent policy across markets and languages. On the other hand, the individual modules cater to different risk levels and coverage needs of businesses. You may need to provide proof of your cash flow, credit score, and the amount of coverage you currently have.

Customer Risk Assessment

Banks view businesses with accounts receivable insurance as more reliable borrowers.
Accounts receivable insurance can also cover the costs of re-establishing your accounts receivable records, such as hiring an IT consultant specialising in data loss recovery.
For example, a manufacturing company may file a claim with its property insurance provider to recover losses due to a fire at its facility.
With a thorough understanding of this insurance type and the selection of an appropriate policy, businesses can confidently navigate the risks of customer non-payment.
They’ve contracted with a Fortune 100 “A” Rated American insurer, insurance agencies, and commercial lenders.

Impairment losses should be recognized when there is objective evidence of impairment, such as the insurance provider's financial difficulties or a significant delay in payment. Secondly, insurance receivables can have a significant impact on a company's cash flow. Timely receipt of insurance payments can improve a company's working capital, allowing them to invest in growth opportunities, pay suppliers, and meet other financial obligations. On the other hand, delays in receiving insurance payments can strain a company's cash flow and hinder its operations. Therefore, accurately reporting insurance receivables is crucial for managing cash flow effectively.

Protection Against Political and Economic Instability

These claims could be related to various types of insurance, such as property, casualty, liability, or health insurance. For example, a manufacturing company may file an insurance claim to recover losses incurred due to a fire at their facility. The insurance receivable represents the amount the company expects to receive from the insurance provider to compensate for the damages.

Account receivables discounting, also known as invoice discounting or factoring, is a financial transaction...
Then, we send your policy application to multiple insurance carriers for quotes, which include buyer coverage commitments and proposed terms and conditions.
Credit insurance helps mitigate these risks, allowing you to grow into new markets confidently.
Unfortunately, its client base was extremely mobile, and its paper-driven accounts receivable processes made it difficult to get monthly invoices to policyholders before they had traveled to a new town.
Accounts receivable insurance, also known as AR insurance or trade credit insurance, protects a company against financial losses caused by damage to its accounts receivable (AR) records.
Delivers solutions around the globe in support of master-controlled programs and locally compliant policies.
The process behind accounts receivable insurance involves several connected steps designed to manage credit risk systematically.

Finsurance policies and scheduled Buyer Limits are non-cancelable for the one-year term of the policy. The simulation above shows the additional turnover that your company must achieve to compensate for the loss due to a non-payment. From economic briefs to unique business information data and insights, Coface can help your business operate smarter and safer to achieve your growth ambitions and more. Insurance provides a direct solution, turning uncertain receivables into protected assets. A Canadian business was expecting to make a $50,000 profit on roughly $1 million of annual sales. However, one larger customer owing $60,000 didn’t pay due to bankruptcy wiping out the profitability of the business.

Upon approval, the insurer compensates the business for the unpaid invoice amount, helping to mitigate the financial impact.
Trade Credit for Multinationals provides global sellers with a controlled master program that combines the advantages of local and global credit insurance.
Once they approve the customer invoice, they also offer up to 90% upfront payment to your business, so you don't have to wait for payment until the credit term ends.
Working capital revolvers support/finance inventory and a seller’s collective receivable credit risk.
For instance, if a regulatory change reduces the reimbursement rate for a specific medical procedure, it can lower the value of insurance receivables related to that procedure.

The policy should safeguard you against risks such as non-payment, customer bankruptcy, and political disruptions. Make sure it aligns with the specific needs of your industry to avoid any gaps in protection. AIG is one of the most reliable trade credit what are retained earnings insurance companies with over 35 years of experience. It has customers in over 70 countries and offers credit management tools, debt collection services, and comprehensive AR insurance.

RIAC’s members are Receivables Insurance Brokers and Providers on the frontline of risk mitigation for businesses in Canada.
Accounts receivable insurance, often known as trade credit insurance, is a business insurance solution that protects your business against the non-payment of invoices.
This one policy approach enables them to offer a standard and transparent policy across markets and languages.
In these situations, customers may struggle to pay their bills due to factors like currency devaluation, changes in government policy, or global financial crises.
Learn more about how Atrium Insights works to strengthen your business intelligence and create new trade opportunities.

Accelerate premium collections and stabilize insurance cash flow

Considering that accounts receivable can represent up to 40% of a company’s assets, working with a broker like ARI significantly strengthens your financial safety net. ARI’s customized policies and extensive global network enable businesses to address specific risks effectively. And with premiums typically costing less than 0.5% of turnover, this protection offers tremendous value for safeguarding a major portion of your assets. Selecting a trade credit insurer that truly understands your industry is a critical step in securing financial stability and fueling business growth.

They specialize in trade credit insurance and have 160 offices in 50 countries. Trade credit insurance providers calculate the premium as a fraction, usually $1 to $1.50 per $1,000 of sales. With an average company holding 40% of its assets in the form of trade debts, there is a greater chance that a business will experience a loss within its accounts receivable than any other asset.

It can be crucial to your business’s financial strategy, providing stability and security. These services can help you recover money owed more efficiently, saving you time and resources. Failing to collect a customer’s payment can be your fault, say when you forget to invoice them. So if you’re still relying on physical paperwork that needs to be carried between offices accounts receivable insurance and signed by hand, you’re wasting a lot of time and effort. Of course, if you haven’t fully automated your accounts receivable, you’re also likely spending too many hours on invoicing, dunning, and cash application. A long-time food industry client was approaching renewal at a time when their business model had become high risk through government restrictions.