What is Trade Credit Insurance?

Trade credit insurance protects businesses against the risk that a B2B customer fails to pay an invoice because of insolvency, protracted default or political risk in export markets. Insurers typically cover 75% to 90% of the outstanding invoice value, with the business retaining the remainder as a co-insurance excess. Also known as accounts receivable insurance or debtor insurance, it allows businesses to extend credit confidently to new customers and enables higher borrowing against insured receivables. Premiums are based on the business's turnover, customer credit quality and claims history.