This is the most popular type of policy. It covers your entire sales ledger against non-payment through default or insolvency and is structured to suit your company’s specific needs and objectives. It can be extended to include political risk should you supply export markets. These policies have a modest excess to exclude smaller predictable losses, and typically 90% indemnity is offered on each qualifying loss. There is a blended premium rate, which encompasses all customers whatever their risk rating. Larger customers are usually vetted via the insurers online system supported by Xenia’s Account Management team. For more modest debtors the client will usually have the ability to agree cover based on pre-agreed processes.

This provides protection against the insolvency of a specified customer which can be for debt already invoiced and costs of your work in progress incurred prior to the failure of your debtor. Indemnity is typically between 90-95% of the credit limit agreed. The period of cover is flexible, and can be arranged on an annual basis or for the time frame of a specific contract with premiums based on the Insurers calculation of the risk rating of your customer.

As part of a risk management strategy a business can decide to fund bad debts up to an agreed amount, set at a level where the cumulative impact of losses is not deemed to have an adverse impact on profitability. A catastrophe policy is in effect reinsuring credit management systems, whilst ensuring the company is protected against a major, unforeseen failure, or series of larger losses. There are insurers who specialise in catastrophe credit insurance.

Top-up policies allow access to additional insurer protection on the same risk(s). This may be due to size of facility or due to restricted appetite on a customer or market. This can be used on a Single Account, Catastrophe or Whole Turnover policy.

Sales ledgers change daily and therefore it is crucial that your credit insurance arrangements are flexible so that limits increase and decrease keeping premium at appropriate level. Some insurers are prepared to provide their credit limits on a non-cancellable basis, meaning that they will not cancel cover during the policy period. This usually means higher premium or greater risk share. Good credit management disciplines are also required in such cases.