Credit insurance is a good tool at the service of companies, enabling them to optimise their risk management by protecting their business accounts against the potential risk of long-term arrears and the insolvency of their clients. Thus, the insurance company guarantees the insured company the compensation, to the percentage of the guarantee agreed, of the losses that it experiences due to the insolvency of its debtors.
Currently, insurance companies provide coverage of 90% or up to 95% of debt in some cases. But never the totality. And as far as compensation time is concerned, companies usually pay the insured at two, three and six months. The diversity of offers on the market allows the company to choose between different forms of coverage and compensation.
As we said, credit insurance is a product aimed at companies that sell their products or services on credit, both on the domestic market and for export. In addition to covering the insured with an indemnity, this insurance provides a service of permanent analysis of the solvency of the client portfolio of the insured company.
In short, credit insurance allows companies to strengthen their risk selection systems, outsource their recovery processes, as the company will be in charge, and be covered against the risk of default of their domestic and international customers.