Credit Insurance

Written by Administrator

Sunday, 22 March 2009 08:23

Credit Insurance, powerful business tool offered by Al Mulla – covers the payment risks resulting from the delivery of goods or services – so why take unnecessary risks?

Credit Insurance

Briefly, it is the insurance of your debtors. An insurance policy is issued, covering your domestic or international debtors (if you are an exporter) in which each of your debtors are investigated, and an insurance policy issued covering against payment default by them.

Credit insurance is a powerful business tool and your company will immediately benefit three fold:

Extensive Bank Credit - Banks are likely to offer you more extensive credit facilities on more favorable terms if your debtors are credit insured. Confidence to Explore High Risk Business - Credit insurance gives you the absolute confidence to explore higher risk business opportunities you would normally avoid for fear of non payment. Cash Protection - It protects your cash flow by replacing cash promptly, should any customer's insolvency or payment default occur

Please don’t take unnecessary risks when for a nominal fee, bad debt can be eliminated. By simply insuring your debtor's payment risk, Al Mulla secures that you'll always be paid. Benefits and Advantages

• Protection against non-payment

• Expert assessment of credit and country risks

• Ability to develop new markets in different countries & in different industries

• Increased market penetration - whether it’s within the U.A.E or Globally

• Continual improvement in the quality of customers and therefore a lower incidence of bad debt

• Enhanced financing mechanisms by providing added security to finance providers Exclusion

Credit Insurance is usually mistaken, certain conditions are not covered.

The credit risk that is insured has to have a direct link with an underlying trade transaction, i.e. the delivery of goods or services. If no such direct link exists, the outstanding amount is not insurable under a

credit insurance policy.

Credit Insurance must not be confused with Factoring - Credit insurers insure against the risk of non-payment; factoring company buys receivables. Additional Information

Please find additional information in our folder, or contact us directly Al Mulla Insurance Brokers constantly striving to perfect our services.

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What is it? Credit insurance insures suppliers against the risk of non-payment of goods or services by their buyers. This may be a buyer situated in the same country as the supplier (domestic risk) or a buyer situated in another country (export risk). The insurance covers non-payment as a result of insolvency of the buyer or non-payment after an agreed number of months after due-date (sometimes referred to as protracted default). It may also insure the risk of non-payment following an event outside the control of the buyer or the seller (political risk cover), for example the risk that money cannot be transferred from one country to another. How does it work & what are their values?
The credit insurer issues a credit limit for every buyer with whom the policyholder trades. The level of the limit is set at the maximum amount that can be owed by the buyer at any time. Limits are granted at a lower level, if the underlying information justifies this. The granted credit limit is the maximum insured credit line for a specific buyer and the policyholders can trade on an insured basis within the approved credit limit throughout the policy period without further reference to the insurer. If a discretionary limit has been agreed, exposures up to that amount do not have to be agreed by the insurance company but are covered based on the payment experience of the policy holder.

Last Updated on Sunday, 22 March 2009 08:43