This type of Business Insurance covers businesses from the potential risk of financial loss due to non-payment by debtors to whom they have credited money to. If a business has sold a product or service to a customer who has a certain amount of time to pay for the product or service, and they don’t do so, the business will be financially covered to ensure business and cash flow continues, while protecting the balance sheet against bad debt losses.
Benefits of Credit Risk Insurance:
Businesses can also hire credit insurance companies to assist them when it comes to risk management. Features of a credit insurance company include:
Which businesses need Credit Risk Insurance?
Businesses of all shapes, sizes and sectors can use Credit Risk Insurance to ensure the financial safety of their daily operations, but an example would be a manufacturing business that has invested in a large amount of materials, production and delivery in order to supply customers with a certain number of finished products. If the client does not pay for all of the products or becomes insolvent, the manufacturer can claim against this loss from the Credit Risk Insurance provider.
If you have yet to think about Credit Risk Insurance as part of your Business Insurance needs, shop around for quotes online with Hippo.co.za to find a policy best suited to your business.
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