Trade Credit Insurance
What is Trade Credit Insurance?
If you are a company selling products or services on credit terms, or a financial institution financing those sales, you are providing trade credit. When you provide trade credit, non-payment by your buyer or borrower is always a possibility. FCIA’s Trade Credit Insurance products protect you against loss resulting from that non-payment.
A debtor's non-payment can be caused by commercial events such as insolvency or protracted default. On international transactions, non-payment can also result from the occurrence of disruptive political events such as wars, government interventions, or currency inconvertibility.
Trade Credit Insurance can be a cost-effective mechanism for transferring risk. Premiums are generally charged either as a percentage of sales or as a per annum rate on limits. Premium rates are influenced by various factors including country risk, obligor risk, length of payment terms, and your loss experience.
Claims are eligible to be filed with FCIA within a specified period after the date of default and are adjusted shortly thereafter. At the time of claim payment, the insured assigns us a valid debt for collection.
