Trade Credit Insurance
Trade credit insurance, also referred to as accounts receivable insurance or debtor insurance, is a type of insurance designed to protect a business against the inability of a customer to pay for products sold on trade credit. Trade credit insurance helps a business secure ba1nk financing on far better terms because banks have greater confidence that their clients' customers will repay their debts.
The ability of a company to offer trade credit encourages their clients to buy in greater quantities, which often results in volume discounts for the buyer and better pricing for the seller.
Insurance companies price their policies on the size and number of customers covered, their creditworthiness, and the risks inherent in the industry in which they operate.