This type of cover is now available to a much wider range of companies.
So-called ‘non-cancellable’ insured credit limits issued by credit insurance companies used to only be applicable to large corporate policyholders with sophisticated credit management and prepared to accept significant levels of self-insurance (excess). However, this type of cover is now potentially available to a much wider range of mid-market companies.
Non-cancellable cover does not remove the requirement on the part of the policyholder to act with due care and prudence when granting credit, but it does remove the ability of the insurer to reduce or cancel cover if they receive information such as poor financial accounts (which is a common reason why limits are reduced or cancelled).
The question is whether you prefer the early warning feature of the traditional ‘cancellable’ credit limit products versus the certainty of cover for a 12-month period with non-cancellable credit limits.
Several of the trade credit insurers can now consider elements of non-cancellable cover, either on a hybrid basis or across the entire customer base. If you are comfortable sharing invoice transaction data with an insurer on a regular basis, then even Discretionary cover can be non-cancellable (and calculated automatically based on your trading experience).
If the idea of non-cancellable cover is attractive, why not gain a health check on your three largest customers? We’ll provide an overview of the credit risk attaching to your 3 biggest customers based on the view of a panel of our insurance partner underwriters. This will deliver valuable insights into credit risk, allowing you to make informed decisions about the level of credit offered to your top customers.
