Most businesses will set internal credit limits for their customers and on occasion the levels agreed can rise to levels far higher than your customer’s balance sheet would support. This decision may fall to you and if you call it wrong and the buyer fails you may have exposed yourself to large credit limit exposures. You then have the unenviable task of reporting this to the Board. Get in touch with us here to find out more information on how this can be avoided.
Example:
Our client is a multi-million pound supplier of poultry to the main supermarket retailers. They recognised that their exposure to the processing company (that their birds pass through before hitting the shelves for the consumer), was uncomfortably high and stood out as a large and concentrated risk on their debtor listing. The Financial Director and the Owner decided to seek credit insurance cover in order to ensure that the business was properly safeguarded and that they could both ‘sleep easy’ at night.
“Our reasons for buying credit insurance have always been straightforward; a very large exposure and level of concentration gave us cause for concern and we thought it prudent to transfer this risk to the commercial insurance market.” – Financial Director
