2 min read
Definition
Credit insurance (or trade credit insurance) covers a business against non-payment by customers due to insolvency or prolonged default, indemnifying an agreed percentage of the insured receivable.
In plain terms
It lets you extend credit and grow with large customers without betting the company on any single one paying. The insurer also monitors buyer risk for you.
Why it matters for your company
For businesses with concentrated customers, credit insurance is cheap protection against a single failure becoming your failure. It pairs naturally with disciplined credit control. See bad debt.
Related reading
Bad debt
Bad debt is money owed to your business that you no longer expect to collect — an invoice or loan that has…
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Credit control
Credit control is the discipline of deciding who you extend credit to, on what terms, and how you collect —…
Read →Accounts receivable
Accounts receivable is what customers owe you for credit sales — a current asset whose growth ties up cash…
Read →Unsecured creditor
An unsecured creditor has no charge over any asset, so it sits near the back of the insolvency queue — the…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.