q & A

q: how MUCH DOes credit insurance cost?

A: It generally costs between 0.1% to 1% of estimated turnover (excluding GST, cash/intercompany sales & government work) depending on the structure of the policy. Premium Rates vary between 0.1% & 1% of annual sales depending on the market segment, loss history, spread of risk, total amount of sales to be insured and the largest exposures requiring cover. 

 

Q: HOW MUCH DOES A BUSINESS NEED TO REALISE THE BENEFITS OF A TRADE CREDIT INSURANCE POLICY?

A: All businesses can benefit from this type of cover from small business through to large multinationals. Businesses of any size can take up a policy but generally a need to be turning over close to a $1M annually before it becomes cost effective. 

 

 

 

 

 

 

 

Q: AM I ONLY ABLE TO LODGE A CLAIM WHEN A BUYER BECOMES INSOLVENT?

A: No, Credit Insurance can also provide cover for protracted default (continued non payment) minimising the impact on cash flow

 

Q: WHO ASSESSES THE CREDIT RISK & HOW ARE CREDIT LIMITS DETERMINED?

A: The insurer analyses the credit risk and reviews the credit limits of your major buyers based on your businesses requirements. You may choose to retain decision making authority on accounts to an agreed level.

 

Q: HOW MUCH ADDITIONAL WORK WILL BE REQUIRED?

A: The policy should fit in with your existing credit management and if anything reduce the amount of work required (no need to continue chasing trade references)

 

Q: HOW SOON WILL MY CLAIM BE PAID?

A: Following the formal insolvency of the buyer, claims are generally paid within 30 days of receiving proof of debt.