Credit Insurance: Definition, Operation And Advantages!

For effective protection against the general consequences of unpaid invoices, more and more companies are turning to credit insurance. Apart from the fact that it allows companies that have subscribed to it to secure the trade receivables as best as possible, credit insurance is also a solution that ensures them sustainable growth over the long term. To learn more about this solution and also easily understand how it works, simply read the information below. Credit insurance can be defined as insurance that offers a guarantee against various risks to a company when the latter is faced with non-payment of its trade receivables. of the outstanding amount in the credit insurance contract to which the company has subscribed. It should also be noted that one out of two credit insurance contracts is most of the time used to insure receivables that have been financed within the framework of factoring .

It is also important to keep in mind that this insurance does not cover late payment by customers. To do this, it is recommended to also subscribe to a factoring contract. Better understand how credit insurance works For a company to be able to develop its activities as well as possible, it is essential that it anticipates the risks of non-payment while ensuring effective prevention of customer risk, especially in the midst of unpredictable economic conditions. In Europe, particularly in France, non-payments are generally caused by the failure of one in four companies. The use of credit insurance is therefore an excellent choice when it is important to secure the trade receivables and guarantee the company profitable growth over the long term.

What Guarantees Does Credit Insurance Offer?

For an easy understanding of how credit insurance works , it will then be necessary to dwell on the various Ecuador Phone Number List services it offers: Prevention of the risk of non-payment Preventing the risk of non-payment essentially consists of carefully assessing the company’s financial situation. Thanks to this evaluation, the credit insurer then issues an opinion on each customer of the said company. Ultimately, this allows him to confidently determine a maximum coverage amount for clients who have successfully obtained his approval. Customer monitoring Once the amount of coverage for the most reliable customers, the insurer monitors their financial situation on a daily basis. It then has real-time information relating to the various events that occur in the lives of said customers.

Ecuador Phone Number List

This information is of course provided to the company, which allows it to take the necessary decisions and precautions in time when necessary. The management of the various unpaid bills For effective management of all unpaid debts of the company, the insurer involves the departments below: The litigation department, which will be responsible for monitoring any litigation; The claims department, which ensures the disbursement of indemnities. Compensation for various bills Compensation within 5 months from the day the file to the department. Generally, the level of coverage corresponds to 90%.

Specific Credit Insurance Products

The amount of the claim. Solutions each type of business To enable companies to develop in complete.  Security while managing to conquer new markets under the best possible conditions. Various credit insurance solutions are now them organizations such as Coface . Among these solutions, which are all modular, we will mention in particular: Solutions adapted to very small businesses; Solutions adapted to SMEs. Adapted to large accounts. Solutions adapted to VSEs. These flat-rate solutions at a price and ensure automatic and immediate coverage of customers up to 60%. This rate may, depending on the circumstances, rise to 90%. This solution also has various advantages such as: Better control of cash flow thanks to the flat rate;

Easy and simplified management of the contract; Optimal prospecting. Solutions adapted to SMEs The modular solutions and additional guarantees offered.  SMEs enable them to ensure the permanent solvency.  Their customers and to have their invoices collected by specialists in the field. This solution also guarantees the compensation of the company.  In the event of non-payment as well as the efficient and real-time management of the receivables. Solutions adapted to large accounts Thanks to the credit insurance solutions offered to large accounts.  They benefit from Premium support thanks. which they manage to carry out adequate monitoring of contracts. The different advantages of credit insurance.  In addition to the fact company risk of non-payment of debts.

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