There are various types of Credit Insurance policies available from many underwriters in the Credit Insurance market. Below is an overview of the different structures of policies and our experienced team can advise you on how these types of policies can be tailored to meet your requirements. The Credit Insurance market is constantly evolving with Underwriters regularly adding to their product suites in order to increase their offering, please contact us to find our more.
This type of Credit insurance policy is designed to cover your entire turnover against insolvency and default. Policies are usually structured with an excess of £500-£1,000 and many underwriters are now offering fixed premiums inclusive of credit limit charges as well as an integrated collections facility.
The Credit Insurance market caters for insurance cover on one key buyer. Unlike a Whole Turnover policy which provides the insurer with a portfolio of risk, there is clearly a much greater concentration of risk to an Insurer when issuing a Single Risk policy. As such only a selection of Insurers will provide Single Risk policies and these are normally only agreed on highly rated companies and subject to a minimum premium.
In certain cases where the cover requirement is significant it may be necessary to share the risk across multiple insurers via a syndicate of insurers.
This type of Credit Insurance policy covers a selection of between 2 and 20 of your key customers, usually the largest accounts on the ledger. These policies usually cover both insolvency and protracted default and an excess would apply.
“Top Up” Credit Insurance policies are a potential solution which allows existing credit insurance policyholders to secure additional cover on either one or a selection of buyers where the primary insurer is not able to provide the required level of cover. This may be due to either a lack of capacity or risk appetite.
Top Up policies are now offered by a number of insurers and whilst each insurer’s product differs slightly, typically a Top Up policy will match the credit limit agreed under the primary policy, subject to agreement of the primary insurer.
Insurers offering Top Up polices will stipulate certain criteria which policyholders will need to meet in order for them to offer this type of policy. This could be a minimum premium, minimum Credit Limit size or a minimum number buyers that the Insurer will require to issue a Top-Up policy.
This type of Credit Insurance policy is designed to suit companies with turnover in excess of £10 million who have in place effective and sophisticated credit control procedures. The insurer will normally underwrite the company’s credit control procedures and will seek a greater share of risk with the policyholder. This is normally via an Annual Aggregate Deductible, in excess of which claims are payable. The deductible is usually set at a level of at least £25,000 and more commonly at £50,000 – £500,000.