Trade credit insurance

It is a matter of historical fact that it takes a lifetime to create wealth and often a single event will destroy that lifetime’s work. In almost all cases that event is beyond the control of the victim. If I had to nominate the most common cause I would choose a major client going insolvent. It is true that there is nothing you can do after the customer has gone broke, but there is something you can do beforehand.

One of the fundamental questions every businessperson asks himself is how do I economically manage the multiple risks faced in the day to day transactions of my operation. That question is a big one and today we will examine one area – managing the risk of insolvent clients. Despite your adviser banging on endlessly about the risk of client concentration (client concentration occurs when the inability of any single client or closely linked group of clients to pay their account puts the whole business at risk); it is a given that there are industries and circumstances where it is unavoidable. This being the case how do we manage it?

Like many insurance policies trade credit insurance will vary in its coverage from insurer to insurer. At the very least you should be looking for the following features:

  • Customer insolvency
  • Protracted default
  • Close to real time market intelligence
  • A partner who can assist with collections and risk management
  • What are the benefits
  • Cash flow security
  • Expert credit advice
  • Big brother backup
  • Negotiating point with financiers

Contact Warren Maris today on 07-3483-0102 to discuss the matter further on a no obligation basis.

Note – Magnus Business Advisers and Accountants do not accept commissions or referral fees from any party external to the client arrangement.

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