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What is the difference between Export and Domestic cover?
The major difference between Export and Domestic cover for an Insurer is that Domestic policies usually involve a lot of smaller customers. This means an additional Excess may be required to eliminate a high volume of small claims.
Why Do Exporters Need Trade Finance?
Most firms rely on external capital (as opposed to their own capital, internal cash flows and reinvested earnings) to finance fixed costs—such as research and development, advertising, fixed capital equipment.
What happens when my customer is overdue?
Under the terms of the policy you must exhaust every avenue of recovery available to you. This means phone call, letter, email etc.
Why are correct legal entities so important?
From an insurance perspective correct legal entities are crucial. It is absolutely imperative that the policyholders and customers are 'spot on', otherwise we could effectively be covering the wrong company.
Why do I have to estimate my annual turnover?
No one expects you to have a crystal ball to see into the future and know exactly what your turnover will be! A conservative estimate of your turnover provides us with a guideline for what the annual premium.
Why do I have to exclude cash sales and sales to related parties?
There is no point in covering cash sales as there is no credit risk when you are getting the cash ‘in hand’! And there is also no point in providing cover for inter-company sales or sales to related companies, as there will often be a conflict of interest that makes claim payment very difficult!
What kind of deductibles can my company have for a Trade Credit policy?
The standard deductible is an Each and Every Excess and this can vary from $5,000 right up to $100,000. So for every claim an Excess is applied. Often the higher the Excess, the more the Insured is prepared to cover themselves in order to secure a better premium rate.
What is the Discretionary Limit?
The Discretionary Limit (DL) is like a ‘line in the sand’ on your debtor’s ledger. Anyone above this 'line’ needs to be evaluated by the Underwriters and monitored during the course of the policy year.