Understanding International Credit Insurance: A Complete Guide
Credit insurance is a type of insurance designed to protect businesses against losses due to non-payment by customers.
For credit managers and finance managers, credit insurance can be an essential tool for mitigating risk and protecting the financial health of their organizations.
How Credit Insurance Works.
Credit insurance typically works by providing coverage for a percentage of the value of invoices that remain unpaid by customers due to insolvency, bankruptcy, or other specified reasons.
Depending on the policy, credit insurance may cover all customers or only those who meet certain creditworthiness criteria.
When a customer fails to pay an invoice, the policyholder submits a claim to the insurer. The insurer then investigates the claim and, if approved, pays out the insured amount, minus any deductibles or co-payments.
