{"id":3460,"date":"2025-12-18T08:10:29","date_gmt":"2025-12-18T08:10:29","guid":{"rendered":"https:\/\/ribesalat.com\/?p=3460"},"modified":"2025-12-18T08:10:33","modified_gmt":"2025-12-18T08:10:33","slug":"selecting-non-payment-insurance","status":"publish","type":"post","link":"https:\/\/ribesalat.com\/en\/selecting-non-payment-insurance\/","title":{"rendered":"How to choose a non-payment insurance policy"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Protecting what you have built through hard work is a priority. <\/strong>No one wants to face financial problems caused by third parties failing to meet their commitments. That\u2019s why having a safety mechanism to back you up in these scenarios is vital. This is where <strong>non-payment insurance<\/strong> comes into play.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At <strong>Rib\u00e9Salat<\/strong>, we see every day that non-payment affects not only peace of mind, but also puts pressure on cash flow, halts growth plans, or turns an investment into a problem. That\u2019s why we\u2019re going to explain what <strong>non-payment insurance<\/strong> is, the types available, what it covers, and much more so you can obtain maximum protection for your business.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is non-payment insurance?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Also known as <strong><a href=\"https:\/\/ribesalat.com\/en\/products\/credit\/\">credit insurance<\/a><\/strong>, it is a policy designed to <strong>reduce the economic impact when the other party does not pay what they owe. <\/strong>Depending on the case, it can cover unpaid rent, unpaid commercial invoices, or loan instalments when the debtor is unable to meet them due to covered circumstances. There are different types:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Non-payment of rent<\/strong>: protects landlords against unpaid rent and usually includes legal defence related to the lease agreement.<br><\/li>\n\n\n\n<li><strong>Non-payment of invoices<\/strong>: protects against insolvency or late payment by clients.<br><\/li>\n\n\n\n<li><strong>Loan default (aimed at individuals)<\/strong>: covers loan instalments in cases such as unemployment or temporary incapacity, depending on the policy conditions.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key benefits of non-payment insurance<\/strong><\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Risk prevention<\/strong><\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">The insurer <strong>continuously monitors<\/strong> each client in your portfolio and provides information on <strong>solvency <\/strong>and <strong>payment behaviour<\/strong>. With this data, you can make more informed business decisions and maintain a safer sales policy, especially when:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Expanding your portfolio with new clients<br><\/li>\n\n\n\n<li>Increasing credit limits for existing clients<br><\/li>\n\n\n\n<li>Entering sectors with higher payment uncertainty<br><\/li>\n<\/ul>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li><strong>Debt recovery<\/strong><\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">If prevention works well, non-payments are reduced. Even so, when a serious delay or default occurs, credit insurance provides a practical advantage: <strong>debt recovery<\/strong> is handled by <strong>specialised professionals<\/strong>, which usually increases the likelihood of recovering an insured sale while, at the same time:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reducing internal administrative burden<br><\/li>\n\n\n\n<li>Preventing your sales team from burning out chasing payments<br><\/li>\n\n\n\n<li>Helping to preserve the relationship with the client, since the complaint is handled professionally<br><\/li>\n<\/ul>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li><strong>Compensation<\/strong><\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">When recovery is unsuccessful or takes longer than reasonably expected, non-payment insurance provides <strong>compensation <\/strong>for the loss according to the policy\u2019s limits and conditions. This way, a significant non-payment does not automatically translate into a financial hole that drags down the business.<\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li><strong>Direct impact on financial health and growth<\/strong><\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">As a result of these three layers (prevention, recovery, and compensation), credit insurance:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Protects the balance<\/strong> sheet by limiting the damage caused by <a href=\"https:\/\/www.bbva.com\/es\/salud-financiera\/que-es-la-morosidad-y-que-consecuencias-tiene\/\" target=\"_blank\" rel=\"noopener\">late payments<br><\/a><\/li>\n\n\n\n<li>Helps improve <strong>cash flow<\/strong> by reducing the impact of non-payments and prolonged delays<br><\/li>\n\n\n\n<li>Enhances the <strong>ability to request financing<\/strong> by providing greater stability and control over customer risk<br><\/li>\n\n\n\n<li>Allows negotiating <strong>better payment terms<\/strong> with more confidence<br><\/li>\n\n\n\n<li>Facilitates opening <strong>new business relationships<\/strong> more securely when aiming to grow without overexposure<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Who is required to pay for credit insurance?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">It depends on the type of <strong>credit insurance (non-payment insurance<\/strong>) and how the commercial relationship has been agreed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>General rule: the party that wants to protect its receivables or balance pays<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Typically, it is contracted and paid for by <strong>the company exposed to non-payment<\/strong>. For example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Sales on credit (invoices to clients)<\/strong>: usually contracted by the company that sells and invoices, because it is the one seeking to protect its accounts receivable.<br><\/li>\n\n\n\n<li><strong>Rental of premises or other leases<\/strong>: usually taken out by the party wishing to guarantee rent payments (typically the landlord, if the aim is to cover tenant defaults).<br><\/li>\n\n\n\n<li><strong>Financing or loans<\/strong>: paid by the party seeking to cover its instalments in case of income loss, if it is linked to payment protection insurance.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>When the client \u201crequires it\u201d: not a legal obligation, but a commercial condition<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In some sectors or transactions, a client may request specific coverage (or certain guarantees) as a condition to close the deal. In such cases, it is not that the law requires payment: <strong>it is part of the agreement between companies<\/strong>. This can occur, for example, when:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Long payment terms are negotiated<br><\/li>\n\n\n\n<li>Entering new markets or dealing with unknown buyers<br><\/li>\n\n\n\n<li>Working with major accounts that impose risk management requirements<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Can the cost be passed on to the client?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Sometimes, attempts are made to pass it on indirectly (for example, by adjusting prices or payment terms). However, normally the cost is treated as a <strong>risk management expense<\/strong> and is factored into the commercial policy: margins, credit limits, terms, and early payment discounts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How long does it take to approve a non-payment insurance policy?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The \u201capproval time\u201d doesn&#8217;t usually depend on the type of <strong>credit insurance<\/strong> or the information available. In general, the clearer and more complete the documentation, the faster the coverage can be issued.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Non-payment of invoices<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Approval is usually structured in two stages:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Initial setup and configuration of the policy<\/strong>: includes analysis of your business (activity, volume of credit sales, history of non-payments, concentration by clients, countries if exporting) and definition of conditions (which operations are covered, limits, deductibles, and how non-payment is managed). This stage can take longer because it is customised to your portfolio.<br><\/li>\n\n\n\n<li><strong>Client approval (credit limits)<\/strong>: once the policy is in place, a limit is requested or assigned for each buyer. This limit is what allows you to sell with greater security. In portfolios with good information and identified clients, this step is usually faster. When data is missing or the buyer is more complex, it can take longer.<br><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Non-payment in rental of premises or other leases<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In leases, approval focuses on analysing the tenant\u2019s risk (solvency and payment history if available) and validating the contract and documentation. If everything is provided from the start, the response can be quick; if there are missing items or changes to conditions, the process is extended.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What usually slows down approval&nbsp;<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Client portfolio highly concentrated in a few accounts<br><\/li>\n\n\n\n<li>Lack of financial statements or buyer information<br><\/li>\n\n\n\n<li>International operations or complex corporate structures<br><\/li>\n\n\n\n<li>Requested limits high compared to purchase history<br><\/li>\n\n\n\n<li>Need to adapt conditions (excess, exclusions, terms)<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How much does credit insurance cost?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The cost of a <strong>credit insurance policy<\/strong> is usually not a fixed rate, but is calculated <strong>based on the actual risk and how your business sells<\/strong> (to whom, how much, in what terms, and with what client concentration).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Non-payment of invoices<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Credit insurance is usually calculated taking into account variables such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Volume of credit sales<\/strong>: the higher the insured amount, the greater its weight in the premium<br><\/li>\n\n\n\n<li><strong>Client portfolio profile<\/strong>: average solvency, payment history, dispersion or concentration<br><\/li>\n\n\n\n<li><strong>Risk concentration<\/strong>: relying on a few large accounts entails higher risk than a diversified portfolio<br><\/li>\n\n\n\n<li><strong>Sector and type of buyers<\/strong>: some sectors have structurally higher default rates than others<br><\/li>\n\n\n\n<li><strong>Payment terms<\/strong>: longer terms tend to increase risk<br><\/li>\n\n\n\n<li><strong>Geographic scope<\/strong>: domestic sales vs. exports, countries and currency, where applicable<br><\/li>\n\n\n\n<li><strong>Claims history<\/strong>: previous non-payments and how they were handled<br><\/li>\n\n\n\n<li><strong>Level of coverage<\/strong>: indemnity percentage, limits per buyer, excesses, waiting periods and exclusions<br><\/li>\n\n\n\n<li><strong>Services included<\/strong>: client monitoring, prevention tools and debt recovery management<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Non-payment in the rental of premises or other business leases<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Pricing usually depends on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Amount of rent<br><\/li>\n\n\n\n<li>Monthly instalments covered<br><\/li>\n\n\n\n<li>Tenant solvency and supporting documentation<br><\/li>\n\n\n\n<li>Scope of legal defence and possible additional coverage<br><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What tends to makes the policy more expensive<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>High concentration in a few clients<br><\/li>\n\n\n\n<li>High limits per buyer<br><\/li>\n\n\n\n<li>Extended payment terms<br><\/li>\n\n\n\n<li>Presence of markets with a higher uncertainty of collection<br><\/li>\n\n\n\n<li>History of non-payments or recurring incidents<br><\/li>\n\n\n\n<li>Need for broader coverage (higher indemnifiable percentage or lower excess)<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Don&#8217;t let a non-payment decide for you<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Non-payment insurance<\/strong> makes the difference between managing a default with a clear plan or facing it through urgency, legal costs and wear and tear. The key lies in matching the right type of policy to the reality of your company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you want to review options and terms with sound judgement, at <strong>Rib\u00e9Salat <\/strong>we are your <strong>insurance and reinsurance broker<\/strong>, with over <strong>35 years of experience<\/strong>, helping you compare cover, limits and requirements without wasting time on the small print. <strong>Request a<\/strong> <strong><a href=\"https:\/\/ribesalat.com\/en\/contact\/\">consultation<\/a> <\/strong>so we can advise on the solution that best fits your case.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Selecting the right non-payment insurance policy is a strategic decision to protect your business\u2019s liquidity and financial stability. Properly assessing the type of risk, your customer profile, payment terms and the scope of cover will help you minimise the impact of late or non-payments and trade with greater confidence.<\/p>\n","protected":false},"author":15,"featured_media":3458,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[40],"tags":[],"class_list":["post-3460","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insurance-and-financial-solutions"],"_links":{"self":[{"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/posts\/3460","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/comments?post=3460"}],"version-history":[{"count":2,"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/posts\/3460\/revisions"}],"predecessor-version":[{"id":3462,"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/posts\/3460\/revisions\/3462"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/media\/3458"}],"wp:attachment":[{"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/media?parent=3460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/categories?post=3460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ribesalat.com\/en\/wp-json\/wp\/v2\/tags?post=3460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}