As a business owner, you know how important it is to maintain positive cash flows to ensure the stability and growth of your company. However, when your debtors fail to pay for the goods / services that you have provided, your cash flows can be disrupted and your business can suffer.
That's where trade credit insurance (TCI) comes in. TCI is a type of insurance that protects your business from non-payment risks – Domestic or Exports. It ensures that you get paid for the goods / services that you have provided, even if your customers fail to pay for any financial or political risk.
At Origin, we have developed a strong domain expertise in credit insurance and help clients understand the nuances of the product and assist in managing post policy obligations under the policy. Trade Credit Insurance policies protects your trade from the following risks:
Customer Insolvency: If your customer becomes insolvent, your business may not receive payment for the goods / services you provided.
Protracted Default: If your customer fails to pay for an extended period dur to financial stress they are undergoing, your business may suffer from a lack of cash flows. TCI provides your business with the liquidity it needs to continue operating by indemnifying this loss within limited time lines.
Political Risks: For exports political risks such as currency inconvertibility or political upheaval can pose a serious threat to your business.
At Origin, we understand your trade and provide right solution to help you manage your trade credit risk.
Various options available under Credit Insurance include:
Whole Turnover: This policy covers entire portfolio of unsecured trade, either domestic and/or exports and provides protection against non-payment risks for all your customers.
Excess of Loss: This type of solution indemnifies the loss beyond and agreed level of deductible. Depending on the appetite to absorb loss by individual corporates, such policy can be structured to reduce premium outflow..
Project Risk: Single project can be covered for its tenor which can be more than 12 months and can include not only non-payment risks but also contract frustration. For overseas such contracts will also include political risks
Trade credit insurance policies comes with range of benefits, including:
Protection against non-payment risks
Improved cash flows
Access to financing, by assigning the policy to Bank/NBFC as extended loss payee
Reduced bad debt reserves
Explore new markets in exports
If you're interested in learning more about how credit insurance can benefit your business, speak with one of our credit insurance experts to understand the benefits and secure peace of mind.
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