How much does trade credit insurance cost?​

At Allianz Trade, all policies are tailored to the needs of each business. Therefore, the trade credit insurance price you pay will likely differ from other companies.

However, if you’d like a guide price idea of how much it costs, you can calculate a trade credit insurance premium based on a percentage of your sales. This is generally a fraction less than 1%. For example, if your sales amounted to £4 million last year and you wanted to cover that entire amount, the premium would usually be less than £13,500.

Your insurance premiums are based on various factors, such as:

• Your industry
• Your annual revenue
• The financial history of the business, including any bad debts
• Current internal credit procedures
• Your customers’ creditworthiness (the risk associated with all of them, if there’s a mix)
• Where you’re doing business
• If you export and also require political risk cover
• The type of policy you choose

When you contact our team, we’ll provide you with an accurate cost for a policy designed to cover your specific business needs.

When providing a trade credit insurance price, our team will always consider your financial history. However, it’s important to know, if your history shows a high number of defaults by clients, it doesn’t necessarily mean you’ll have a higher trade credit insurance premium.

Many factors are considered, including some that can outweigh a poor receivables history such as market outlook for your industry and future demand for your products.

For some, trade debts can make up to 40%, or more, of a business’ assets, so a missed payment can have a huge influence on cashflow and working capital. Protecting this income can prove invaluable.

Furthermore, a trade credit insurance policy can typically offset its own cost many times over, even if you never make a claim. Trade credit insurance can help you feel secure in extending more credit to current customers or pursuing new, larger customers that would have otherwise seemed too risky. Therefore, your sales and profits will increase without taking on additional risk.

You may decide to invest in trade credit insurance if you’re looking to:

• Expand sales with confidence, whether selling more to existing customers or pursuing new customers.
• Access better financing terms, as banks will typically lend more capital against insured receivables.
• Make your best possible business decisions by quickly accessing your trade credit insurer’s information risk data.
• Protect against non-payment and catastrophic loss.
• Expand into new international markets, backed by protection from unique export risks and the market knowledge to make accurate growth decisions.
• Reduce bad-debt reserves, freeing up capital.

If you’d like to learn more about joining them, please get in touch for free today or try our  trade credit insurance price calculator for an instant premium estimate.