What is credit insurance?

A policy that insures manufacturers, wholesalers, or service companies that sell on open credit terms against credit loss(es) due to a situation beyond control - a customer's inability to pay. The most common causes of non payment are bankruptcy, Chapters XI Insolvency & Chapter VII Liquidation.) On foreign sales, political risk is also included. 

What are the advantages?

It guarantees that your company will not suffer major catastrophic bad debt losses that may impact on your profitability. Most companies are able to safely increase sales - to existing customers, gain new customers, and grow new markets by transferring the credit risk to an insurance company. Most lenders will increase available credit lines and increase the advance rate on the eligible borrowing base. It provides valuable assistance in making difficult credit decisions by providing expert third party opinions. The policy may enable you to avoid losses.

Must all my customers be included?

We can structure a policy to meet your needs. You can insure only domestic sales, only export sales, or a combination of domestic & export sales. Did you know that the unit cost of export sales can be greatly decreased if both domestic and foreign sales are included, instead of export only? We can insure in some instances a single buyer, "key" accounts only, all buyers with a requested credit limit in excess of "X", or the entire portfolio. Because the insurers provide incentives to include all customers, most of our clients prefer the portfolio approach. By the way, the insurance companies that only insured a single buyer only for policyholders, have all gone out of business.

Can we add customers during the year?

The policies are dynamic in that at any time during the policy year, you can increase credit lines on existing customers, add new customers, and reduce or remove existing credit lines. Most insurance companies have created simple and rapid processes to access your policy electronically.

Will my customers be aware that they are insured?

Your company invoices the customer and collects, just as before you started this program. Your customers are never notified that you are requesting insurance on their company. 

Can my bank benefit from the policy?

A credit insurance policy is an enhancement to the lender. The bank will gain comfort in knowing that either your customer or the insurance company will be paying the due invoices. All the insurers can provide an endorsement which names the bank as a "beneficiary" in the event of loss payment to your company. This may enable the lender to increase your advance rate percentage and eligible borrowing base.

How do you implement a custom made plan for my business?

We learn what is of interest to you and create a plan. Do you want domestic only? Export only? Both domestic and export? Do you want to cover all customers, key customers only? Do you want to exclude a customer or a few customers? Do you want to include one division or subsidiary only? We then assist in the completion of an application which can be submitted to all the insurance companies. There are no costs for this service. All the insurers are aware of the expertise of The Credit Insurance Source and that we submit the application to several insurers. Therefore we are able to obtain the most advantageous terms for your company.

The application package is then submitted to several insurance companies. You will receive an Excel spreadsheet which outlines the key elements of the different offers. The offers are explained in detail and the advantages and disadvantages of each offer are discussed. We can further negotiate to obtain even a "sweeter" deal. At your option, we can assist in the decision making of which offer to select. Once you select a company, we explain the policy on delivery, service all your needs, advise on new developments, and provide excellent service throughout the life of the policy. The policies usually are a one year term and we also assist in the renewal process.

How long does this process take?

Under normal circumstances, we can obtain all the offers within 2-3 weeks from the day of our receipt of all the required application documents.

Does it cost more to employ The Credit Insurance Source? 

No. Our advantage is over twenty five years experience and expertise in all the options and policies.