In a business environment where financial stability is essential, companies constantly face the risk of non-payment by their customers. This risk can significantly affect the liquidity and growth capacity of any business. Against this backdrop, credit insurance has become an indispensable tool to protect companies against these financial risks.
What is Credit Insurance?
Credit insurance is a contract that covers a company’s credit sales, protecting it against the risk of default. It includes services such as the continuous assessment of customer solvency, debt recovery and compensation for losses.
Benefits of Credit Insurance
- Financial Protection: Keeps the company’s finances healthy by minimising losses due to default.
- Cash Flow Improvement: Ensures a constant flow of cash, which is vital for daily operations and business growth.
- Facilitates Financing: Improves the ability to obtain financing by demonstrating solid risk management.
- More Secure Payment Conditions: Lets companies negotiate better payment terms with customers and suppliers, increasing the security of transactions.
Risk Prevention Credit insurance includes continuous monitoring of the customers’ solvency and payment behaviour. This proactive monitoring lets you identify potential problems before they turn into defaults, which provides a solid foundation for informed commercial decisions.
Debt collection If defaults do occur, the professional debt recovery service reduces the administrative burden and increases the recovery rate. It also helps preserve business relationships through respectful and professional interactions.
Compensation If the debt recovery is unsuccessful, the credit insurance provides compensation for losses suffered, thus providing a financial security net for companies. This compensation minimises the impact of defaults on the company’s balance sheet, offering financial stability and confidence in commercial operations.
Implementing credit insurance is essential for any company that sells on credit. It not only protects against financial risks, but also facilitates financing and improves business relationships.
